IBC moratorium exclusion where purchaser rights crystallised before moratorium allows completion of enforcement and possession.

Interplay between enforcement under the Securitisation Act and the IBC moratorium is addressed: where a sale certificate was issued and registered and purchaser rights crystallised before commencement of moratorium, those enforcement steps are not stayed; the DRT order halting further steps on account of a subsequently filed Section 95 application was set aside. The court applied principles of waiver and equitable estoppel given repeated settlement negotiations and delay by borrowers, and noted concerns of collusion and abuse of process in the later petition; consequential possession and completion steps may proceed and the DRT must decide the securitisation application on merits within a directed timeframe.

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Issues: Whether the one-line order of the Debts Recovery Tribunal dated 26th November 2025 halting further steps pursuant to a registered sale certificate (on account of a subsequently filed application under Section 95 of the IBC) was unsustainable and whether the secured creditor and auction purchasers could proceed with physical possession and consequential steps without awaiting disposal of Interim Application No. 2207 of 2025.

Analysis: The facts show long delay by the borrowers/guarantors after service of notice under Section 13(2) of the Securitisation Act, repeated one time settlement proposals, symbolic possession and multiple failed auctions, followed by a completed auction, issuance and registration of a sale certificate in favour of the auction purchasers prior to the filing of insolvency applications relied upon to claim moratorium. The legal framework involves the interplay between the Securitisation Act (enforcement of security, auction and sale certificate) and the IBC moratorium provisions that commence upon filing of petitions under Sections 94/95 and operate under Section 96. Prior adjudication (NCLT order dated 2nd September 2025, affirmed on appeal and by the Supreme Court) held that the secured asset and sale stood excluded from moratorium because the sale and crystallization of purchasers' rights occurred before commencement of moratorium. The DRT's impugned order operated to stay further steps despite those findings and in circumstances where documents supporting the later Section 95 petition raised strong suspicion of collusion and abuse of process. Principles of waiver and equitable estoppel (as applied in relevant precedent) are engaged where the borrower repeatedly permitted settlement negotiations and did not timely challenge enforcement steps, and where third-party rights have crystallized. The balance of rights and the object of IBC (time bound resolution and maximization of asset value) and the Securitisation Act (enforcement of security) favour allowing lawful completion of steps that were concluded prior to any moratorium.

Conclusion: The impugned DRT order dated 26th November 2025 is set aside. The secured creditor need not await disposal of Interim Application No. 2207 of 2025 before taking further steps pursuant to the registered sale certificate; consequential possession steps shall proceed in accordance with law and the DRT shall expedite and decide the securitisation application on merits within the directed timeframe.

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