Interim moratorium under insolvency law bars continued SARFAESI enforcement against debt, even after prior possession steps.

The interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016 stays legal action in respect of the debt from the date of the application and protects the debt itself, not merely the debtor. On that basis, a secured creditor cannot continue SARFAESI enforcement once insolvency proceedings against a personal guarantor commence, even if symbolic possession or other measures under Section 13(4) were taken earlier. The distinction from Section 14 does not alter the effect of Section 96. Continuation of SARFAESI proceedings was therefore barred during the interim moratorium.

---

---

Issues: Whether the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016 bars continuation of SARFAESI proceedings against a mortgaged property where symbolic possession had been taken before initiation of insolvency proceedings against the personal guarantor.

Analysis: The interim moratorium under Section 96 operates from the date of the application and stays legal action or proceedings in respect of any debt. The protection is directed to the debt and not merely the debtor, and it extends to proceedings by a secured creditor under SARFAESI once insolvency proceedings against the personal guarantor commence. Prior symbolic possession or earlier steps under Section 13(4) of the SARFAESI Act, 2002 do not, by themselves, permit further enforcement after the moratorium begins. The distinction between Section 14 and Section 96 does not assist the secured creditor, because the latter separately protects the debt from further coercive action during the interim moratorium.

Conclusion: The continuation of SARFAESI was barred during the interim moratorium, and the appeal failed.

Ratio Decidendi: Once an application under Section 95 triggers the interim moratorium under Section 96, a secured creditor cannot continue enforcement of security interest under SARFAESI in respect of that debt, even if earlier possession-related steps had already been taken.

---