Interim moratorium under insolvency law does not validate a non-est prior petition, and an express continuing guarantee preserves guarantor liability.

Section 95 of the Insolvency and Bankruptcy Code, 2016 triggers an interim moratorium, but a later application is not barred where the alleged earlier proceeding was itself instituted during an already operating moratorium and is therefore non-est in law. On the facts discussed, the later financial creditor's petition was treated as maintainable, and concealment of connected proceedings did not invalidate it. The guarantee issue was decided by reading the loan documents and guarantee deed together: the guarantor's liability continued because the guarantee expressly survived any change in the borrowers' constitution, and the guarantor remained co-extensive with the principal borrower until repayment.

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Issues: (i) Whether the second Section 95 application filed by the financial creditor was barred by an interim moratorium allegedly triggered by another creditor's earlier Section 95 application; (ii) whether the guarantor stood discharged on account of the change in the borrower's constitution and whether the Tribunal could act on the appellant's non-disclosure of connected proceedings.

Issue (i): Whether the second Section 95 application filed by the financial creditor was barred by an interim moratorium allegedly triggered by another creditor's earlier Section 95 application.

Analysis: The statutory scheme of Sections 95 and 96 of the Insolvency and Bankruptcy Code, 2016 provides that filing of a Section 95 application triggers an interim moratorium, but that consequence cannot be built on a proceeding that was itself instituted during an already operating interim moratorium and is therefore non-est in law. On the facts, the earlier petition filed by the first creditor was found to have preceded the later creditor's petition, making the later filing by the first creditor's second petition not barred by the alleged moratorium arising from the non-est proceeding. The Tribunal also treated the alleged misuse of parallel proceedings and concealment of material facts as insufficient to invalidate the maintainability of the second petition in the circumstances.

Conclusion: The second Section 95 application was not barred and its admission was upheld, against the appellant.

Issue (ii): Whether the guarantor stood discharged on account of the change in the borrower's constitution and whether the Tribunal could act on the appellant's non-disclosure of connected proceedings.

Analysis: The loan documents and guarantee deed were read together to show that the entity whose name changed was a co-borrower and that the guarantee expressly continued despite any change in the constitution of the borrowers. In such a contractual setting, the guarantor's liability remained co-extensive with that of the principal borrowers until repayment of the loan. The Tribunal further held that a litigant is bound to disclose all material facts, and the appellant's omission to disclose the parallel proceeding amounted to concealment and abuse of process, making the Tribunal's reliance on the connected record unobjectionable.

Conclusion: The guarantor was not discharged, and the objection based on change of borrower failed, against the appellant.

Final Conclusion: The impugned admission order was affirmed and the appeal was rejected because the later Section 95 proceeding was maintainable and the guarantor's liability continued notwithstanding the change in the borrower's description.

Ratio Decidendi: A Section 95 application filed during an interim moratorium can be treated as non-est if the moratorium itself arose from a proceeding that was not legally maintainable, and a guarantor remains liable where the guarantee expressly survives changes in the borrower's constitution.

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