Valid filing of an insolvency application triggers Section 96 moratorium, with interim protection preserved pending NCLT record verification.

A validly filed insolvency application before the NCLT is stated to trigger the statutory moratorium under Section 96 of the Insolvency and Bankruptcy Code, with the question of defects or refiling to be verified from the NCLT record. The text also notes that, where pending insolvency proceedings are brought to the notice of the DRT, the effect of those proceedings should be considered before further coercive steps are taken. On that basis, limited interim protection was granted, status quo was maintained in relation to the subject property, and the NCLT record was called for pending further consideration.

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Issues: (i) Whether the moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016 was triggered on filing of the insolvency application before the National Company Law Tribunal; (ii) whether the pendency and filing status of the NCLT proceedings ought to have been considered by the Debt Recovery Tribunal while passing the impugned order and whether interim protection was warranted.

Issue (i): Whether the moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016 was triggered on filing of the insolvency application before the National Company Law Tribunal.

Analysis: The application of the creditor before the National Company Law Tribunal was treated as potentially triggering the statutory moratorium once it was validly filed. The order noted that the record suggested initial filing, subsequent refiling, and eventual registration, and that whether the application was defect-free and validly filed could be verified from the National Company Law Tribunal record. The Court also noted that compliance with the filing procedure and the effect of defects required factual confirmation from that record, but there was no dispute that a valid filing would attract Section 96.

Conclusion: The moratorium under Section 96 was held to be triggered upon valid filing of the insolvency application.

Issue (ii): Whether the pendency and filing status of the NCLT proceedings ought to have been considered by the Debt Recovery Tribunal while passing the impugned order and whether interim protection was warranted.

Analysis: The impugned order contained no discussion on the effect of the pending insolvency proceedings, despite the position being brought to the notice of the Debt Recovery Tribunal. In view of the prima facie material, the Court considered it appropriate to seek a report from the National Company Law Tribunal and to preserve the subject matter pending further consideration. Limited interim protection was therefore granted to maintain the existing position until the next date.

Conclusion: Interim protection was granted and status quo was directed to be maintained.

Final Conclusion: The petition was kept pending for further consideration, while the existing position concerning the subject properties was preserved and the record from the National Company Law Tribunal was called for.

Ratio Decidendi: A validly filed insolvency application before the National Company Law Tribunal triggers the statutory moratorium, and where the effect of such filing is brought to the forum's notice, interim protection may be granted pending verification of the filing status from the tribunal record.

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