Scope of the IBC - CIRP - Effect of moratorium - proceedings ...

Section 14 of IBC 2016: Balancing Agreements and Liabilities During Corporate Insolvency Resolution Without Affecting Moratorium Period.

December 28, 2022

Case Laws     Insolvency and Bankruptcy     HC

Scope of the IBC - CIRP - Effect of moratorium - proceedings where both the parties may gain out of the agreement/contract. - Section 14 of the Code of 2016 is meant to refer those proceedings where even the corporate debtor would be a gainer, apart from third party, because third party would not fall under the definition of “creditor”. The bankruptcy proceedings remains generally to secure the institution by applying the measures given under the Code of 2016 and it is mainly in reference to the debt liability of the company and not to apply during the period of moratorium. It does not exclude application of other provisions to be given effect to and as the petitioner illustrated, in regard to the exclusion of the decree for specific performance where even a corporate debtor would be receiving the monies. - HC

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