Section 69 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 69 punishes an officer of the corporate debtor, or the corporate debtor itself, who has made a gift, transfer or charge over the debtor's property, or caused or connived in the execution of a decree against it, or who has concealed or removed property shortly before an unsatisfied judgment. The punishment is imprisonment of one to five years, or a fine of one lakh to one crore rupees, or both. A proviso excludes old acts and acts done without intent to defraud. This article explains the section as per the IBBI consolidated text of the Code amended up to 12 August 2021. Section 69 is not touched by the Insolvency and Bankruptcy Code (Amendment) Act, 2026.
An officer of the corporate debtor or the corporate debtor is punishable if it has made a gift or transfer of, or charge on, the debtor's property, or caused or connived in the execution of a decree or order against that property, or has concealed or removed property within two months before an unsatisfied judgment, decree or order for payment of money. The punishment is imprisonment of not less than one year and up to five years, or fine of one lakh to one crore rupees, or both. No punishment for acts in clause (a) done more than five years before the insolvency commencement date, or if he proves no intent to defraud creditors.
The opening words
Section 69 reads: "If an officer of the corporate debtor or the corporate debtor—". The first word "If" is printed with a footnote mark in the consolidated text. Two kinds of person are named: the officer, and the corporate debtor itself. The consequences in the closing words are put on "such officer of the corporate debtor or the corporate debtor, as the case may be". The corporate debtor can therefore itself be punished under this section, which differs from section 68, where only the officer is named; see our article on section 68. A company cannot be imprisoned, and the section does not say how imprisonment applies to a corporate debtor; the text is silent, and the reader should check how the punishment is applied.
Officers and creditors who need to assess a past transfer can take legal dispute resolution advice on the facts and timing.
Clause (a): gifts, transfers, charges and decrees
Clause (a): the officer or the corporate debtor "has made or caused to be made any gift or transfer of, or charge on, or has caused or connived in the execution of a decree or order against, the property of the corporate debtor".
| Limb | Meaning from the words |
|---|---|
| Gift | any gift of the property of the corporate debtor, made or caused to be made |
| Transfer | any transfer of that property, made or caused to be made |
| Charge | any charge on that property, made or caused to be made |
| Decree or order | having "caused or connived in the execution of a decree or order against" the property |
The clause has no time limit of its own. The only time limit on clause (a) comes from the proviso, which protects acts committed more than five years before the insolvency commencement date. The clause also does not say that the gift, transfer or charge must have been made at an undervalue or with a particular purpose. The test of intent is in the proviso.
Clause (b): concealing or removing property before a judgment
Clause (b): the officer or the corporate debtor "has concealed or removed any part of the property of the corporate debtor within two months before the date of any unsatisfied judgment, decree or order for payment of money obtained against the corporate debtor". The window is two months before the date of the judgment, decree or order, and the judgment, decree or order must be for payment of money, obtained against the corporate debtor, and still unsatisfied. It is a different window from the twelve months before the insolvency commencement date in section 68(i).
The punishment
"Such officer of the corporate debtor or the corporate debtor, as the case may be, shall be punishable with imprisonment for a term which shall not be less than one year, but which may extend to five years, or with fine which shall not be less than one lakh rupees, but may extend to one crore rupees, or with both."
| Element | Words |
|---|---|
| Imprisonment | not less than one year, but which may extend to five years |
| Fine | not less than one lakh rupees, but may extend to one crore rupees |
| Combination | "or with both" |
Compare section 68, where the minimum imprisonment is three years: section 69's minimum is one year. The fine range is the same.
The proviso
"Provided that a person shall not be punishable under this section if the acts mentioned in clause (a) were committed more than five years before the insolvency commencement date; or if he proves that, at the time of commission of those acts, he had no intent to defraud the creditors of the corporate debtor."
Two separate protections follow from the words, joined by "or".
- Age of the act. A person is not punishable if the acts mentioned in clause (a) were committed more than five years before the insolvency commencement date. The proviso names clause (a) only; it does not name clause (b), which has its own two-month window.
- No intent to defraud. A person is not punishable if he proves that, at the time of commission of those acts, he had no intent to defraud the creditors of the corporate debtor. The burden is on the person to prove it. The words "those acts" in the second limb refer back to the acts mentioned in clause (a) in the first limb; whether they also cover clause (b) is not stated in the section, and the reader should check the official text on that point.
How section 69 relates to the avoidance provisions
Section 69 is an offence section. The civil side of transactions defrauding creditors is in section 49, which deals with an undervalued transaction that the corporate debtor deliberately entered into to keep assets beyond the reach of a person entitled to make a claim, or to adversely affect that person's interests, and under which the Adjudicating Authority makes an order restoring the position; see our article on section 49 and the live post on avoidance transactions under sections 43 to 51. Section 69 attaches imprisonment and fine to the individuals and the debtor, and the two routes are separate. Other offence sections are covered in the live post on offences under sections 68 to 73, and the next section in this series is section 70.
Example
Evergreen Dairy Pvt Ltd loses a suit and a decree for payment of money is passed against it. Six weeks earlier, its managing officer, Mr Pillai, concealed stock worth several lakh rupees. Under clause (b), concealment within two months before the date of the unsatisfied decree is covered. Separately, three years before the insolvency commencement date, the company made a gift of land to a relative; the gift is within clause (a), and because it was made less than five years before that date, the age protection in the proviso does not apply. Mr Pillai can still show he had no intent to defraud the creditors at the time. The names and facts are invented.
Amendments and the Amendment Act, 2026
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 does not amend section 69. The Amendment Act, 2026 comes into force on the date or dates the Central Government notifies; the notification is not in the texts consulted, so check whether any related change has been notified. Section 49, the civil counterpart, is amended by section 29 of that Act; see the article on section 49. Amendments and notifications made after 12 August 2021, other than the Amendment Act, 2026, are not in the texts consulted and should be checked.
Need help with a transfer that may defraud creditors?
Whether a gift, transfer, charge or removal of property falls within the section depends on dates, the judgment and the intent at the time. Our team can help officers and creditors review the record through legal dispute resolution.
Key takeaways
- Section 69 names an officer of the corporate debtor and the corporate debtor itself.
- Clause (a) covers gifts, transfers and charges of the debtor's property, and causing or conniving in the execution of a decree or order against it; clause (b) covers concealing or removing property within two months before an unsatisfied judgment, decree or order for payment of money.
- Punishment: imprisonment of not less than one year and up to five years, or fine of one lakh to one crore rupees, or both.
- No punishment for clause (a) acts committed more than five years before the insolvency commencement date, or if the person proves no intent to defraud creditors at the time.
- The Amendment Act, 2026 does not amend section 69.
Read next
- Section 68: punishment for concealment of property
- Section 70: misconduct during the corporate insolvency resolution process
- Section 49: transactions defrauding creditors
- Avoidance transactions under sections 43 to 51
Disclaimer: Based on the IBBI consolidated text of the Insolvency and Bankruptcy Code, 2016 amended up to 12 August 2021 and on the Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026), which comes into force on the date or dates notified by the Central Government, as consulted on 2 October 2026. It explains the words of the statute only; commencement notifications, other amendments made after 12 August 2021, notified thresholds, the rules and IBBI regulations, and the way tribunals and courts apply these sections should be checked. This article is general information, not legal advice; check the official text before acting.