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.
Judicial Pronouncements:
J2. For contrast Section 14 with Sections 96 and 101, refer State Bank of India v. V. Ramakrishnan and Anr. (2018) ibclaw.in 29 SC.
Access complete Bare Act here. To research Section and sub-section wise judgments, visit here.
Follow for daily updates: