Interim moratorium for a personal guarantor is debt-specific and does not stop enforcement against partnership firm assets.

Interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016, triggered by a personal guarantor proceeding under Section 95, operates only in relation to the relevant debt and does not extend to unrelated assets or liabilities. On that basis, mortgaged properties standing in the name of a partnership firm were outside the scope of the guarantor's personal moratorium, because the guarantor had no personal ownership interest while the firm subsisted. Dissolution notice did not convert firm-owned assets into personal assets or attract the moratorium to those properties. The overriding effect of the Code and partnership-debt priority provisions did not alter that position, so SARFAESI action and auction notices against the firm's properties could continue.

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Issues: Whether the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016, triggered by proceedings under Section 95 against a personal guarantor, bars the secured creditor from proceeding with auction of properties standing in the name of a partnership firm under dissolution; and whether dissolution of the firm or the overriding provisions of the Insolvency and Bankruptcy Code, 2016, alters that position.

Analysis: The application under Section 95 had been filed against the appellant in his personal capacity as a personal guarantor. The interim moratorium under Section 96 was held to operate in respect of the debt and not against the debtor's unrelated assets or liabilities generally. The expressions "all the debts" and "any debt" were treated as showing that the protection is debt-specific. The subject properties were in the name of the partnership firm, and the appellant had no personal ownership interest in those assets while the firm subsisted. The dissolution notice did not convert the firm's mortgaged properties into the appellant's personal assets, nor did it bring those properties within the scope of the personal-guarantor proceedings. The appellant's reliance on the overriding effect of the insolvency code and on priority provisions concerning partnership debts did not assist him because the moratorium did not extend to the firm-owned properties in question.

Conclusion: The interim moratorium under Section 96 did not prohibit the respondent from continuing SARFAESI action against the partnership firm's properties, and the challenge to the auction notices failed.

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