{"id":8722,"date":"2025-03-05T11:57:01","date_gmt":"2025-03-05T11:57:01","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=8722"},"modified":"2025-06-25T12:08:53","modified_gmt":"2025-06-25T12:08:53","slug":"applicability-of-interim-moratorium-u-s-96-of-the-ibc","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/applicability-of-interim-moratorium-u-s-96-of-the-ibc\/","title":{"rendered":"Applicability of Interim moratorium u\/s 96 of the IBC"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-4849\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2022\/08\/Initiation-of-Liquidation-under-the-IBC.jpg\" alt=\"Initiation of Liquidation under the IBC\" width=\"884\" height=\"495\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69daa79ae3dde\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69daa79ae3dde\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/applicability-of-interim-moratorium-u-s-96-of-the-ibc\/#Applicability_of_Interim_moratorium_us_96_of_the_IBC\" title=\"Applicability of Interim moratorium u\/s 96 of the IBC: \">Applicability of Interim moratorium u\/s 96 of the IBC: <\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/applicability-of-interim-moratorium-u-s-96-of-the-ibc\/#Key_Points_from_the_Judgment_in_Saranga_Anilkumar_Aggarwal_vs_Bhavesh_Dhirajlal_Sheth_Ors_the_Supreme_Court\" title=\"Key Points from the Judgment in Saranga Anilkumar Aggarwal vs. Bhavesh Dhirajlal Sheth &amp; Ors., the Supreme Court: \">Key Points from the Judgment in Saranga Anilkumar Aggarwal vs. Bhavesh Dhirajlal Sheth &amp; Ors., the Supreme Court: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/applicability-of-interim-moratorium-u-s-96-of-the-ibc\/#Conclusion_Supreme_Courts_Interpretation_of_Section_96_of_the_IBC\" title=\"Conclusion:\u00a0Supreme Court\u2019s Interpretation of Section 96 of the IBC\">Conclusion:\u00a0Supreme Court\u2019s Interpretation of Section 96 of the IBC<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/applicability-of-interim-moratorium-u-s-96-of-the-ibc\/#IBC_Services_Offered_by_IFCCL_Team\" title=\"IBC Services Offered by IFCCL Team\">IBC Services Offered by IFCCL Team<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/applicability-of-interim-moratorium-u-s-96-of-the-ibc\/#Services_to_Investors_Bidders_Corporates\" title=\"Services to Investors \/ Bidders \/ Corporates\">Services to Investors \/ Bidders \/ Corporates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/applicability-of-interim-moratorium-u-s-96-of-the-ibc\/#Support_Services_to_Insolvency_Professionals_IPs\" title=\"Support Services to Insolvency Professionals (IPs)\">Support Services to Insolvency Professionals (IPs)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/applicability-of-interim-moratorium-u-s-96-of-the-ibc\/#Independent_Advisory_Services\" title=\"Independent Advisory Services\">Independent Advisory Services<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Applicability_of_Interim_moratorium_us_96_of_the_IBC\"><\/span><span style=\"color: #000080;\"><strong>Applicability of Interim moratorium u\/s 96 of the IBC: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In the case of <em>Saranga Anilkumar Aggarwal vs. Bhavesh Dhirajlal Sheth &amp; Ors.<\/em>, the Supreme Court addressed the applicability of the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code (IBC) concerning penalties imposed by regulatory bodies. The Court clarified that such penalties do not fall within the scope of &#8220;debt&#8221; under the IBC, and therefore, the interim moratorium does not shield individuals from regulatory or penal actions.<\/p>\n<p>Scope of Interim Moratorium (Section 96 of IBC): The interim moratorium aims to provide temporary relief to debtors from debt recovery actions during the insolvency resolution process. However, this protection does not extend to proceedings initiated for regulatory infractions or criminal offenses.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Key_Points_from_the_Judgment_in_Saranga_Anilkumar_Aggarwal_vs_Bhavesh_Dhirajlal_Sheth_Ors_the_Supreme_Court\"><\/span><span style=\"color: #000080;\"><strong>Key Points from the Judgment in <em>Saranga Anilkumar Aggarwal vs. Bhavesh Dhirajlal Sheth &amp; Ors.<\/em>, the Supreme Court: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Nature of Regulatory Penalties: Penalties imposed by bodies like the National Consumer Disputes Redressal Commission (NCDRC) are distinct from debt recovery proceedings. They are punitive measures addressing violations of statutory obligations and are not considered &#8220;debts&#8221; under the IBC. The Court distinguished penalties imposed by bodies like the National Consumer Disputes Redressal Commission (NCDRC) from debt recovery proceedings, affirming that such penalties serve a punitive and regulatory function rather than being financial obligations recoverable as debts.<\/li>\n<li>Punitive Actions &amp; Criminal Proceedings: The judgment reaffirms that the interim moratorium under Section 96 does not shield individuals from criminal proceedings or punitive actions initiated by regulatory bodies.<\/li>\n<li>Distinction Between Section 14 and Section 96 Moratoriums: While both sections provide moratoriums, Section 14 pertains to corporate debtors, and Section 96 applies to individual debtors. The Court emphasized that neither section offers absolute protection against all proceedings, especially those arising from regulatory or penal statutes.\u00a0 The Court clarified that while both sections provide certain protections, they <strong data-start=\"1467\" data-end=\"1541\">do not grant immunity from penalties imposed under regulatory statutes<\/strong>.<\/li>\n<li>Proceedings Under Section 138 of the Negotiable Instruments Act vs. Section 27 of the Consumer Protection Act: The Court differentiated between these proceedings, noting that while Section 138 deals with cheque dishonor (a criminal offense), Section 27 addresses non-compliance with consumer forum orders (a quasi-judicial proceeding). The interim moratorium under Section 96 does not bar actions under Section 27 of the Consumer Protection Act.<\/li>\n<li>Judicial Precedents: The Court referred to previous judgments to reinforce that the IBC&#8217;s objective is to resolve insolvency and bankruptcy issues and not to provide a refuge from penalties imposed for statutory violations.<\/li>\n<li>Objective of the IBC: The IBC is designed to balance the interests of all stakeholders and ensure the efficient resolution of insolvency. It is not intended to nullify obligations arising under other regulatory statutes.<strong>\u00a0<\/strong><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Conclusion_Supreme_Courts_Interpretation_of_Section_96_of_the_IBC\"><\/span><span style=\"color: #000080;\"><strong>Conclusion:\u00a0<\/strong>Supreme Court\u2019s Interpretation of Section 96 of the IBC<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Supreme Court&#8217;s judgment clarifies that the interim moratorium under Section 96 of the <strong data-start=\"248\" data-end=\"306\">Insolvency and Bankruptcy Code (IBC) <\/strong>does not extend to penalties arising from regulatory infractions. Such penalties are not categorized as &#8220;debts&#8221; under the IBC, and individuals cannot seek protection under the interim moratorium to evade regulatory or penal consequences.<\/p>\n<h2 data-start=\"182\" data-end=\"219\"><span class=\"ez-toc-section\" id=\"IBC_Services_Offered_by_IFCCL_Team\"><\/span><span style=\"color: #000080;\"><strong data-start=\"182\" data-end=\"219\">IBC Services Offered by IFCCL Team<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 data-start=\"226\" data-end=\"281\"><span class=\"ez-toc-section\" id=\"Services_to_Investors_Bidders_Corporates\"><\/span><span style=\"color: #000080;\"><strong data-start=\"230\" data-end=\"281\">Services to Investors \/ Bidders \/ Corporates<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"282\" data-end=\"686\">\n<li data-start=\"282\" data-end=\"353\">\n<p data-start=\"284\" data-end=\"353\">Drafting of Resolution, Settlement, Repayment &amp; Restructuring Plans<\/p>\n<\/li>\n<li data-start=\"354\" data-end=\"449\">\n<p data-start=\"356\" data-end=\"449\">Assisting MSMEs in preparing Base Resolution Plans under the Pre-Packaged Insolvency Scheme<\/p>\n<\/li>\n<li data-start=\"450\" data-end=\"517\">\n<p data-start=\"452\" data-end=\"517\">Viability assessment of Corporate Debtor\u2019s business during CIRP<\/p>\n<\/li>\n<li data-start=\"518\" data-end=\"567\">\n<p data-start=\"520\" data-end=\"567\">Support in Implementation of Resolution Plans<\/p>\n<\/li>\n<li data-start=\"568\" data-end=\"612\">\n<p data-start=\"570\" data-end=\"612\">Structuring viable Restructuring Schemes<\/p>\n<\/li>\n<li data-start=\"613\" data-end=\"686\">\n<p data-start=\"615\" data-end=\"686\">Guidance on provisioning by banks with reference to wilful defaulters<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"693\" data-end=\"754\"><span class=\"ez-toc-section\" id=\"Support_Services_to_Insolvency_Professionals_IPs\"><\/span><span style=\"color: #000080;\"><strong data-start=\"697\" data-end=\"754\">Support Services to Insolvency Professionals (IPs)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"755\" data-end=\"1121\">\n<li data-start=\"755\" data-end=\"787\">\n<p data-start=\"757\" data-end=\"787\">End-to-end Claims Processing<\/p>\n<\/li>\n<li data-start=\"788\" data-end=\"843\">\n<p data-start=\"790\" data-end=\"843\">Managing operations of Corporate Debtor during CIRP<\/p>\n<\/li>\n<li data-start=\"844\" data-end=\"900\">\n<p data-start=\"846\" data-end=\"900\">Conducting Section 29A disqualification verification<\/p>\n<\/li>\n<li data-start=\"901\" data-end=\"946\">\n<p data-start=\"903\" data-end=\"946\">Preparation of RFRP and Evaluation Matrix<\/p>\n<\/li>\n<li data-start=\"947\" data-end=\"992\">\n<p data-start=\"949\" data-end=\"992\">Designing Frameworks for Resolution Plans<\/p>\n<\/li>\n<li data-start=\"993\" data-end=\"1062\">\n<p data-start=\"995\" data-end=\"1062\">Evaluation of submitted Resolution \/ Settlement \/ Repayment Plans<\/p>\n<\/li>\n<li data-start=\"1063\" data-end=\"1121\">\n<p data-start=\"1065\" data-end=\"1121\">Acting as Scrutinizer for E-voting during COC meetings<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"1128\" data-end=\"1168\"><span class=\"ez-toc-section\" id=\"Independent_Advisory_Services\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1132\" data-end=\"1168\">Independent Advisory Services<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"1169\" data-end=\"1630\">\n<li data-start=\"1169\" data-end=\"1208\">\n<p data-start=\"1171\" data-end=\"1208\">Advisory on Admissibility of Claims<\/p>\n<\/li>\n<li data-start=\"1209\" data-end=\"1244\">\n<p data-start=\"1211\" data-end=\"1244\">Legal validity of CoC decisions<\/p>\n<\/li>\n<li data-start=\"1245\" data-end=\"1302\">\n<p data-start=\"1247\" data-end=\"1302\">Guidance on powers and duties of directors under CIRP<\/p>\n<\/li>\n<li data-start=\"1303\" data-end=\"1396\">\n<p data-start=\"1305\" data-end=\"1396\">Advisory on Resolution \/ Settlement \/ Repayment Plans (including for Personal Guarantors)<\/p>\n<\/li>\n<li data-start=\"1397\" data-end=\"1467\">\n<p data-start=\"1399\" data-end=\"1467\">Preparation of Due Diligence Reports on NPA\/SPA accounts for banks<\/p>\n<\/li>\n<li data-start=\"1468\" data-end=\"1571\">\n<p data-start=\"1470\" data-end=\"1571\">Assistance in issuance of notices and filing of applications under Section 95 (Personal Guarantors)<\/p>\n<\/li>\n<li data-start=\"1572\" data-end=\"1630\">\n<p data-start=\"1574\" data-end=\"1630\">Proxy advisory services for Institutional Shareholders<\/p>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Applicability of Interim moratorium u\/s 96 of the IBC: In the case of Saranga Anilkumar Aggarwal vs. Bhavesh Dhirajlal Sheth &amp; Ors., the Supreme Court addressed the applicability of the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code (IBC) concerning penalties imposed by regulatory bodies. The Court clarified that such penalties do &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[658],"tags":[892],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8722"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=8722"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8722\/revisions"}],"predecessor-version":[{"id":9209,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8722\/revisions\/9209"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=8722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=8722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=8722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}