The National Company Law Appellate Tribunal (“NCLAT”) in Ashok Mahindru and Ors.
v. Vivek Parti,10 while explaining the scope of application of interim moratorium under
Section 96 of the Code stated that interim moratorium applies for only such proceedings
which relate to a liability or obligation which is due on the date of commencement of the
interim moratorium. Accordingly, any proceeding in relation to a liability/obligation which
arises after the commencement of the interim moratorium cannot be stayed under Section 96.
In Ashok Mahindru, the Appellant had sought stay on proceedings under Section
19(2),11 Section 66,12 and Section 67 of the IBC.13 Based on the aforesaid reasoning, the
NCLAT held that such a stay cannot be granted as the same is not contemplated within the
scheme of Code.
In the case of Ms. Sangita Arora v IFCI Limited & Anr., the Hon’ble NCLAT held that the
interim Moratorium is enforced from the date of filing of the Application made under section
95 of Insolvency and Bankruptcy Code 2016 and not from the date it is numbered by the
registry
Axis Trustee Services Limited v Brij Bhushan Singal, CS
The Court observed that a reading of Section 96 IBC makes it clear that the relevant date for
the interim moratorium to come into effect is the date ‘when an application is filed under
Section 94/95’. When the legislature has specifically used the word ‘filed’ in respect of an
application under Section 94/95, the court cannot read the same to mean the date when the
application is “registered”, as is sought to be contended on behalf of the plaintiffs.
M S SICOM INVESTMENTS AND FINANCE LTD VERSUS RAJESH KUMAR
DROLIA AND ANOTHER LNIND 2017 BOM 724
In this case court held that Section 94 deals with an application filed by the debtor to initiate the
insolvency resolution process subject to what is stated in Section 94. Section 95 on the other hand
deals with an application filed by a creditor to initiate the insolvency resolution process of the debtor
(who may be an individual or a partnership firm). This too is subject to what is further stated in
Section 95. Thereafter, Section 96 provides for an interim-moratorium and clearly stipulates that
when an application is filed under section 94 or section 95, the interim moratorium shall commence
on the date of the application in relation to all the debts and shall cease to have effect on the date of
admission of such application. During the interim-moratorium period, any legal action or proceeding
pending in respect of any debt shall be deemed to have been stayed and the creditors of the debtor
shall not initiate any legal action or proceedings in respect of any debt. Sub-section 2 of Section 96
further shows that where the application has been made in relation to a firm, the interim-
moratorium under sub- section 1 shall operate against all the partners of the firm as on the date of
the application.
