Topic
A moratorium under India's Insolvency and Bankruptcy Code suspends legal proceedings and enforcement actions against a corporate debtor during the corporate insolvency resolution process.
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.
An EPF assessment order issued during the CIRP was set aside because the IBC moratorium prevents continuation of such inquiries and the amendment to Section 31(6) extinguishes claims filed before resolution. The ruling limits employees’ provident-fund claims against insolvent companies and guides resolution professionals.
The Bombay High Court ruled that the interim moratorium under Section 96 of the IBC applies only to corporate debtors and does not halt criminal proceedings under Section 138 of the NI Act against company directors. This limits the moratorium’s protective reach, leaving directors exposed to prosecution during insolvency.
The Supreme Court ruled that the IBC’s Section 14 moratorium restrains only the corporate debtor, not the promoters, directors or landowners, allowing the NCDRC to pursue the consumer complaint. This preserves homebuyers’ recourse even during insolvency proceedings.
The Allahabad High Court has ruled that Section 14 of the IBC prohibits all coercive recovery actions against a corporate debtor during CIRP, including the attachment of sugar stock by state authorities. This reinforces that statutory moratoriums override even revenue recovery mechanisms, protecting corporate assets from piecemeal seizure by any creditor, including government agencies.
Bombay High Court holds that a writ petition challenging a Recovery Officer's order remains maintainable during an IBC moratorium, balancing the need for urgent relief against statutory remedies. The ruling clarifies that the moratorium under Section 14 of the IBC does not automatically oust High Court's writ jurisdiction, impacting creditors and corporate debtors seeking interim protection.
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.
NCLAT rules that a SEBI delisting order renders a promoter ineligible under Section 29A(f) of the IBC, overriding the moratorium protection. This precedent bars resolution applicants with market access prohibitions, regardless of the corporate debtor's insolvency status, impacting promoter-led resolution plans.
NCLAT rules that development rights granted to a corporate debtor under a development agreement remain part of its asset pool during CIRP, notwithstanding alleged termination. Any transfer of such rights during the moratorium is void ab initio, reinforcing the sanctity of asset inclusion in insolvency resolution and protecting creditor interests.
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 High Court clarifies that the moratorium under Section 96 of the Insolvency and Bankruptcy Code (IBC) protects only personal guarantors, not the principal borrower. Creditors retain the right to proceed against the borrower under the Contract Act, ensuring recovery actions remain unaffected by guarantors' insolvency.
Supreme Court rules that security deposits made before the commencement of Corporate Insolvency Resolution Process (CIRP) must remain part of the corporate debtor’s estate and cannot be appropriated by operational creditors against pre-CIRP dues. The adjustment of such deposits is permissible only post-adjudication of claims under the IBC, ensuring pari passu treatment of all creditors.
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.
ITAT Delhi holds that Insolvency and Bankruptcy Code's moratorium overrides Income Tax Act proceedings, dismissing cross-appeals as infructuous during insolvency.