Interim moratorium under the Insolvency Code begins on valid registration of the petition, not mere filing or notice.

Under the Insolvency and Bankruptcy Code, the interim moratorium under Section 96 arises only when a Section 94 or Section 95 petition is validly registered, not on mere filing or uploading, and it therefore operated from the date of registration. The absence of intimation to the secured creditor did not prevent the moratorium from coming into force, so the Debts Recovery Tribunal's rejection of the borrowers' interim applications on that basis was unsustainable. Procedural lapses in the NCLT registry's scrutiny and refiling process also could not defeat the effect of a petition that had been registered, though any grievance of abuse or collusion could be pursued before the NCLT in appropriate proceedings.

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Issues: (i) Whether the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016 is triggered only upon registration of a petition under Section 95 and not by mere filing; (ii) Whether the Debts Recovery Tribunal could reject the borrowers' interim applications solely because intimation of the insolvency petition was not given to the secured creditor; (iii) Whether procedural irregularities in the National Company Law Tribunal registry in scrutiny and refiling of the insolvency petition could defeat the effect of the interim moratorium.

Issue (i): Whether the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016 is triggered only upon registration of a petition under Section 95 and not by mere filing.

Analysis: The statutory scheme was read along with the binding directions previously issued regarding scrutiny and registration of petitions under Sections 94 and 95. The Court held that the interim moratorium is a legal consequence of a validly filed and registered petition, and that mere uploading or filing without completion of the prescribed scrutiny and registration process is not sufficient. On the facts, the petition stood registered on 04.11.2025, and the moratorium operated from that date.

Conclusion: The interim moratorium operated from the date of registration and not from the date of initial filing.

Issue (ii): Whether the Debts Recovery Tribunal could reject the borrowers' interim applications solely because intimation of the insolvency petition was not given to the secured creditor.

Analysis: The Court held that commencement and operation of the statutory moratorium cannot depend upon notice being furnished to the secured creditor. The Debts Recovery Tribunal had focused on the absence of proper intimation, rather than examining the legal effect of the moratorium that had already come into force by operation of law. Since the applications were decided after the moratorium had commenced, that approach was held to be erroneous.

Conclusion: The rejection of the interim applications on that ground was unsustainable.

Issue (iii): Whether procedural irregularities in the National Company Law Tribunal registry in scrutiny and refiling of the insolvency petition could defeat the effect of the interim moratorium.

Analysis: The Court found serious procedural lapses in the registry process and noted that the prescribed scrutiny mechanism and refiling discipline were not followed. However, it held that those irregularities could not be used to dilute the effect of a petition that had in fact been registered. The petitioners could not be made to suffer for the registry's error, while any grievance based on alleged collusion or abuse could be examined by the National Company Law Tribunal in appropriate proceedings.

Conclusion: The registry irregularities did not negate the operation of the interim moratorium.

Final Conclusion: The impugned orders of the Debts Recovery Tribunal were set aside and the writ petition succeeded. The respondents were left at liberty to seek appropriate relief before the National Company Law Tribunal regarding the applicability of the moratorium.

Ratio Decidendi: For purposes of Section 96 of the Insolvency and Bankruptcy Code, 2016, the interim moratorium arises by operation of law upon valid registration of a petition under Section 94 or Section 95, and its effect cannot be defeated by failure to intimate the secured creditor or by procedural lapses in registry scrutiny after registration.

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