Topic
The IBC moratorium, under Section 14 of the Insolvency and Bankruptcy Code, suspends certain legal actions against a corporate debtor once a corporate insolvency resolution process is initiated.
The court held that a terminated development agreement is not an 'asset' under Section 14(1)(d), and the Adjudicating Authority's jurisdiction under Section 60(5)(c) is confined to disputes arising directly from insolvency. This permits arbitration proceedings initiated by the corporate debtor to continue during CIRP.
The Delhi High Court lifted a stay on a Section 138 complaint, ruling that the Insolvency and Bankruptcy Code’s moratorium does not extinguish criminal liability for cheque bounce. This ensures borrowers cannot evade prosecution by invoking insolvency protection, affecting all parties in pending IBC cases.
The NCLAT has ruled that RERA orders passed after the commencement of CIRP cannot be used to impose new financial liabilities on a corporate debtor. Only debts existing before the moratorium qualify as operational claims, ensuring that post-CIRP adjudications do not disrupt the insolvency process or unfairly prioritize homebuyers over other creditors.
NCLAT reaffirms that Employees Provident Fund Organisation (EPFO) cannot press claims for damages and interest under Sections 7A, 14B, and 7Q of the EPF Act during the corporate insolvency resolution process. The ruling clarifies that moratorium under Section 14 of the IBC bars assessment proceedings, impacting creditor hierarchy and recovery priorities for statutory dues.
Secured creditors may proceed under SARFAESI Act when an IBC petition filed under Section 95 is never registered by the NCLT Registrar, as no statutory moratorium arises without formal admission. This ruling sharpens procedural compliance standards for insolvency initiations and protects creditor enforcement rights against technical delays or non-filing.
Bombay HC rules that initiation of IBC proceedings after issuance of a sale certificate under the Securitisation Act cannot invoke moratorium to stall possession by auction purchasers. The court condemns chronic defaulters' misuse of IBC to delay enforcement, affirming secured creditors' and purchasers' rights to proceed with asset takeover.
Bombay High Court clarifies that pendency of NCLT petition alone does not trigger moratorium under IBC to halt SARFAESI enforcement unless a formal order is passed.
Bombay High Court holds that once a writ petition is finally disposed of, no interim application can be filed to raise fresh grievances arising thereafter, reinforcing finality of judicial proceedings.