Section 96 of Insolvency and Bankruptcy Code, 2016 (IBC): Interim-moratorium

The Insolvency and Bankruptcy Code, 2016

Part-III Insolvency Resolution and Bankruptcy for Individuals and Partnership Firms

Chapter-III Insolvency Resolution Process

Section 96: Interim-moratorium.

*96. (1) When an application is filed under section 94 or section 95— 

(a) an 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; and

(b) during the interim-moratorium period—

(i) any legal action or proceeding pending in respect of any debt shall be deemed to have been stayed; and

(ii) the creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt.

(2) 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.

(3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.


Reference

*Only in so far as they relate to personal guarantors to corporate debtors, came into force w.e.f. 01.12.2019.


Access complete Bare Act here and Notification and Circular here.

IBC Laws specifically does not make any warranties or representations as to the accuracy, completeness or adequacy of any such Material or the same being up-to-date. IBC Laws periodically updates the Material on this Site whenever amendments are made by Parliament. Refer disclaimer here.

Leave a Reply

Your email address will not be published.