Question

If a bankrupt dies, the bankruptcy proceedings shall ____.

• A. become barred
• B. cease
• C. continue as if the deceased were alive
• D. cease against the deceased and continue against the other debtors

Hint:

Under the IBC, death of the debtor does not halt insolvency or bankruptcy proceedings.

Answer 1

The Correct Option is C

Step 1: Relevant provision under Insolvency and Bankruptcy Code, 2016.
The Insolvency and Bankruptcy Code, 2016 specifically provides that the death of the bankrupt does not abate or terminate the bankruptcy proceedings.
Step 2: Legal effect of death of the bankrupt.
The proceedings continue against the estate of the deceased bankrupt, and the resolution or distribution process is carried forward as if the bankrupt were still alive.
Step 3: Purpose of the provision.
This ensures that creditors’ rights are not defeated merely because of the death of the debtor.
Step 4: Conclusion.
Therefore, the correct answer is (C) continue as if the deceased were alive.