Quick answer: A Section 10 IBC application lets a company in default start its own insolvency process before the NCLT. It files Form 6 with its books of account and a special resolution. The NCLT should decide within 14 days. However, it can reject a petition filed only to block a lender’s SARFAESI action.
A Section 10 IBC application lets a company in default start its own corporate insolvency resolution process (CIRP). Lenders often see it as a delaying tactic. The IBC (Amendment) Act, 2026 changed parts of the provision from 26 May 2026. Here is who can file, what the NCLT checks, and when it refuses.
What Is a Section 10 IBC Application?
Under Section 10(1), a “corporate applicant” may apply to the NCLT once the corporate debtor has committed a default. The corporate applicant includes the company itself and, in some cases, its members or partners. In effect, the company admits its own default.
The minimum default for Sections 7, 9 and 10 remains ₹1 crore under the March 2020 notification.
Who Cannot File Under Section 10?
Section 11 bars some companies from filing. These include a company already in CIRP and one that completed a CIRP in the previous 12 months. A company that breached a resolution plan approved within 12 months is also barred. So is a company under a liquidation order.
How to File a Section 10 IBC Application: Step by Step
- Pass the resolution. Shareholders pass a special resolution. For an LLP, at least three-fourths of the partners must approve the filing.
- Prepare Form 6. Attach books of account and any other information that the regulations specify.
- Disclose all proceedings. List pending SARFAESI, DRT and civil cases.
- File before the NCLT bench. Choose the bench with jurisdiction over the registered office.
- Cure defects within seven days. If the NCLT flags gaps, it must give notice before rejection.
- Await admission. The CIRP and the moratorium start from the admission date under Section 10(5).
What the IBC (Amendment) Act, 2026 Changed
The Act received assent on 6 April 2026. A notification dated 22 May 2026 brought most provisions into force from 26 May 2026. For Section 10, three changes stand out:
- No self-proposed IRP. Clause (b) of Section 10(3) is gone, so the company no longer proposes its own interim resolution professional. Instead, the NCLT seeks the IBBI’s recommendation under new Section 16(3A).
- Reasons for delay. The 14-day admission window already existed. Now, if the NCLT misses it, the bench must record its reasons in writing.
- Simpler admission test. The NCLT no longer checks pending disciplinary proceedings against a proposed resolution professional. Admission now turns mainly on completeness.
Once admitted, the case follows the normal CIRP path. Read our guide to the moratorium under Section 14 IBC to see what it freezes.
Key Case Law on Section 10 IBC
- Unigreen Global v. Punjab National Bank (NCLAT, 1 December 2017): The NCLAT held that the NCLT must admit a complete Section 10 application unless Section 11 bars it. It also set aside a Section 65 penalty imposed without notice.
- Agroha Paper Industries v. Bank of Maharashtra (NCLAT, 25 July 2024): The NCLAT upheld a rejection because the company filed only to pre-empt an advanced SARFAESI recovery.
- Panshul Agro Food LLP v. SBI (NCLAT, reported September 2026): Reports say the NCLAT upheld the rejection of a Section 10 petition but cut the costs from ₹10 lakh to ₹5 lakh.
- Jagannath Polymers (NCLT Cuttack, 6 October 2026): The bench found a valid default and a complete Form 6. Even so, it dismissed the petition under Section 65(1) because the company used it to stall Canara Bank’s SARFAESI auction.
Taken together, these rulings show that completeness is necessary but not always enough. Tribunals now look closely at timing and motive.
What Banks and NBFCs Should Do
A secured lender facing a sudden Section 10 petition should intervene before admission. It should place the SARFAESI timeline on record and, where the facts support it, seek dismissal and costs under Section 65. Experienced IBC and NCLT lawyers in Delhi can help frame this objection early.
Frequently Asked Questions
What is Section 10 of the IBC?
It lets a corporate debtor that has defaulted start its own CIRP before the NCLT.
Who can file a Section 10 IBC application?
A corporate applicant can file, which includes the defaulting company itself. Section 11 bars companies already in CIRP or liquidation.
Is the ₹1 crore threshold applicable to Section 10?
Yes. The default must be at least ₹1 crore, the same limit that applies to Sections 7 and 9.
How long does the NCLT take to admit a Section 10 application?
The NCLT should decide within 14 days of receipt. Since 26 May 2026, it must record written reasons if it takes longer.
Can the NCLT reject a Section 10 petition filed to stop SARFAESI action?
Yes. Tribunals have rejected petitions filed only to defeat a secured lender’s recovery and have imposed costs under Section 65.
Lex Pleaders advises banks, NBFCs and businesses on Section 10 petitions and objections. As a law firm in Delhi NCR, we appear before the NCLT and NCLAT. Write to us at lexpleadersindia@gmail.com to discuss your matter.
Disclaimer: This article offers general information only and does not constitute legal advice.