You can, but the word recover now means something narrower than it did. Against the company, the only door is the liquidator and the only instrument is a proof of claim, and where you stand in the queue is fixed by statute. Against the people who signed the cheque, the criminal case goes on. If your money is an advance for a flat rather than a trade debt, read our answer on a builder in insolvency instead, because allottees are treated as financial creditors. This answer is for the supplier, service provider or lender who is an operational creditor of a company that has reached liquidation.
Can I still file or continue my suit or cheque case against the company?
Not against the company. During the resolution process Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016 bars the institution or continuation of suits or proceedings against the corporate debtor, including execution of any decree. Once the liquidation order is passed, Section 33(5) takes over: subject to Section 52, no suit or other legal proceeding shall be instituted by or against the corporate debtor, and only the liquidator may sue on its behalf with the Adjudicating Authority's approval. The Insolvency and Bankruptcy Code (Amendment) Act, 2026, assented to on 6 April 2026, goes further and requires the liquidation order itself to declare a moratorium for the purposes in Section 14(1)(a) and (c), applied to the liquidation with necessary changes. Section 60(6) gives you one comfort: the period of the moratorium is excluded when computing limitation for any later suit by or against the company.
The directors are a different matter. In P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd., decided on 1 March 2021, a three judge bench of the Supreme Court held that a Section 138 proceeding against the corporate debtor is covered by the moratorium in Section 14(1)(a), but that the moratorium applies only to the corporate debtor, and the natural persons made liable by Section 141 of the Negotiable Instruments Act continue to be liable and can be proceeded against. Your cheque bounce complaint therefore stays alive against the signatory directors even while it is frozen against the company. Who can be made liable under Section 141, and the resignation defence, are set out in our note on directors and Section 141.
How do I file my claim with the liquidator?
The claims machinery changed this year. The 2026 Amendment Act omits Sections 38 to 42 of the Code, which had given the liquidator thirty days to collect claims and creditors fourteen days to appeal a rejection, and instead makes the liquidator maintain an updated list of claims under Section 35(1)(a). The Insolvency and Bankruptcy Board of India rewrote the Liquidation Process Regulations, 2016 to match, with effect from 2 June 2026, and its press release of 4 June 2026 explains the design: claims verified during the resolution process are carried forward and are not re-verified, the public announcement no longer calls for fresh claims, and fresh claims are invited only from stakeholders who did not file earlier. The Act says the amended provisions do not apply to a liquidation that began on or before the Amendment Act commenced, so an older liquidation still runs on the thirty day window and the Section 42 appeal.
- Watch for the public announcement. Regulation 12 requires the liquidator to make it within five days of appointment, in newspapers where the registered office is and on the Board's website.
- Check whether your claim already exists. If you filed with the resolution professional during the resolution process, Regulation 16 carries it forward as on the insolvency commencement date. If you did not, you must submit it within fourteen days of the liquidation commencement date.
- File the proof of claim under Regulation 17, in person, by post or electronically, in the format the Board notified by circular of 2 June 2026, which for operational creditors is the claim form used in the resolution process.
- Prove the debt. Regulation 17(2) lists what does it: records with an information utility, the contract for supply, the invoice demanding payment, any court or tribunal order adjudicating the non-payment, and financial accounts.
- Watch the seven day windows. Under Regulation 30 the liquidator verifies a claim within seven days of receipt, must record reasons for any rejection, and must communicate the decision with reasons within seven days. Regulation 16(3) requires you to update the claim if any part is paid from any source.
- Challenge a rejection before the National Company Law Tribunal, which under Section 60(5) has jurisdiction over any question arising out of the liquidation. Regulation 31 requires the list of stakeholders to be filed with the Tribunal within thirty days of the last date for claims, and you may inspect it.
Where do I stand in the queue?
| Rank | Who is paid |
|---|---|
| (a) | Insolvency resolution process costs and liquidation costs, in full |
| (b) | Workmen's dues for the twenty four months before liquidation, and secured creditors who relinquished their security, ranking equally |
| (c) | Wages and dues of other employees for the twelve months before liquidation |
| (d) | Financial debts owed to unsecured creditors |
| (e) | Central and State Government dues for the two years before liquidation, and secured creditors for any shortfall after enforcing security, ranking equally |
| (f) | Any remaining debts and dues, which is where an operational creditor stands |
| (g) and (h) | Preference shareholders, then equity shareholders |
The Explanation to Section 53 says each class is paid in full or rateably within the class if the proceeds run out. The 2026 Act adds an Explanation confirming that a secured creditor whose security is worth less than its debt is unsecured for the balance, which pushes more of that debt down towards your rank. Distribution is quick once it starts, since Regulation 42(2) now requires the liquidator to distribute within fifteen days of receiving the sale proceeds, and Regulation 44 asks the liquidator to complete the process within one hundred and eighty days. In practice an operational creditor is paid from what is left after ranks (a) to (e), which is often little. The difference between an operational and a financial debt, and why it matters to your rank, is explained in our note on operational and financial debt.
What if it is an old style winding up under the Companies Act?
Check which statutory process applies. Following the IBC amendments, Section 270 of the Companies Act, 2013 concerns winding up by the Tribunal. Section 271 lists its grounds and no longer uses inability to pay debts as the old standalone ground, and Section 279(1) stays every suit or legal proceeding by or against the company once a winding up order is passed or a provisional liquidator is appointed, except with the Tribunal's leave on such terms as it imposes. Section 280 gives the Tribunal jurisdiction over any claim by or against the company. So you prove your debt to the Company Liquidator rather than suing.
What should I put in the claim file?
- The purchase order or contract, and every invoice with proof of delivery or completion
- The ledger and a statement of account showing the balance as on the insolvency commencement date
- Any demand notice, reply, and the dishonoured cheque with its return memo
- Any order of a court, tribunal or facilitation council adjudicating the debt
- Your earlier claim to the resolution professional and its acknowledgement, if any
- The public announcement, so that the fourteen day date is on record
Where creditors lose money in a liquidation is not at the waterfall, which nobody can change, but at the door. They hear the word liquidation, assume the money is gone, and never file, or they file a bare letter without the invoices and are rejected for want of proof. File within the window with the documents Regulation 17 names, keep the acknowledgement, read the list of stakeholders when it is filed, and in parallel keep the Section 138 case moving against the directors, because that is the one proceeding the Code does not freeze. Whether the directors can be made to pay interim compensation is a separate question, dealt with in our answer on prosecuting directors for a bounced cheque.