Creditors cannot exercise set-off during the moratorium under Section 14 of IBC – Meena Sureka Vs. Mr. Santosh Kumar Jaiswal and Ors. – NCLT Guwahati Bench

Hon’ble NCLT Guwahati Bench held that in terms of Section 14 (1)(b), during the period of moratorium any transfer, encumbering, alienating or disposing off the property of the Corporate Debtor is restrained. Further, the Hon’ble NCLAT in a plethora of judgments has held that the creditors cannot exercise set-off during the moratorium. Furthermore, the purpose and object of Moratorium is to temporarily freeze all actions as contemplated under Section 14 to enable the Corporate Debtor to resolve its Insolvency and to revive itself.

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