In this important judgment, Hon’ble NCLAT has interpreted the Section 96 of IBC and held that:
(i) The interim moratorium under Section 96(1)(b)(ii) creates a prohibition on the other creditors of the debtor from initiating any legal action in respect of the debt for which Section 95 has been initiated.
(ii) The moratorium imposed under Section 96 of IBC, 2016, would strictly apply to the security interest created by the Appellant in his personal capacity and will not extend to the cover the subject property being the property of the partnership firm against which Section 95 had not been invoked.
(iii) The assets held in the name of the partnership firm is not the personal property of the Appellant and cannot be subjected to the provisions of interim moratorium merely because a Section 95 application has been filed against a partner of the firm in respect of a personal guarantee given for a party other than the partnership firm.
(iv) Merely because notice for dissolution of the partnership firm was given by the Appellant entailing the devolution of liabilities of the partnership on the partners, that the partnership firm can in turn be said to be saddled with the liabilities arising out of the personal guarantee of the Appellant.