Interim moratorium under insolvency law requires a duly filed application; mere upload will not halt securitisation recovery steps.

A mere upload of an application under Part III of the Insolvency and Bankruptcy Code, 2016, without it being duly numbered or admitted, does not by itself trigger interim moratorium under Section 96. The protection against legal proceedings therefore arose only on a valid filing of a complete application, and the strict stay provisions were not attracted on these facts. The Court also noted that Section 238 does not automatically override proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, because the two laws operate in different fields. As the petitioner was a guarantor, the insolvency framework could not be used to restrain securitisation recovery steps.

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Issues: Whether the filing of an application under Section 94 of the Insolvency and Bankruptcy Code, 2016, without the application being duly numbered or admitted, automatically triggers interim moratorium under Section 96 so as to stay securitisation ings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and whether the Code overrides those proceedings in favour of the petitioner.

Analysis: The statutory scheme in Part III of the Insolvency and Bankruptcy Code, 2016 provides that interim moratorium under Section 96 and moratorium under Section 101 operate in cases of individuals and partnership firms, but the consequence flows only from a valid filing of a complete application. Since the application in question had only been uploaded and had not been assigned a regular case number by the adjudicating authority, it was not treated as a duly filed application for the purpose of Section 96. The provisions creating stay of legal proceedings were therefore construed strictly and were held not to be attracted on the facts. The Court also held that Section 238 does not displace the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 in every situation, as the two enactments operate in different fields. In addition, the petitioner being proceeded against as a guarantor, the protection available under the insolvency regime could not be used to restrain recovery steps under the securitisation law.

Conclusion: Interim moratorium was not shown to have come into force, and the securitisation proceedings could continue. The challenge to the recovery action failed.

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