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.

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