The Calcutta High Court set aside a recovery decree issued during the IBC Section 96 interim moratorium, holding the suit was barred under Section 96(1)(b)(ii). This reinforces the protective nature of the moratorium against creditor actions.
Calcutta HC Rejects Suit Filed During IBC Moratorium
The Calcutta High Court has set aside a recovery decree, stating that the suit filed during the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code (IBC) was barred by statutory provisions. The court referred to Section 96(1)(b)(ii) which explicitly prohibits creditor actions during this moratorium period.
This judgment strengthens the protective mechanism meant to shield companies undergoing insolvency proceedings from immediate creditor actions, reinforcing the legislative intent behind the moratorium provisions of the IBC.
Legal practitioners must familiarize themselves with the implications of this ruling, ensuring that clients and creditors comply with statutory periods where legal actions are restricted. Maintaining awareness of moratorium periods is essential for advising clients effectively in insolvency-related matters.
Citations
- Calcutta HC (2026)
