Declaration of moratorium [ Section 14 ]

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....mencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:- * As per section 14(1)(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; * Relevant Case Laws * In Alchemist Asset Reconstruction Company Limited Vs. Hotel Gaudavan Private Limited - SC, Dated 20.10.2017 * the Supreme Court affirmed that once a moratorium is imposed under the IBC, any proceeding initiated against the CD is non-est (does not exist) in law. * In Canara Bank Vs. Deccan Chronicle Holdings Limited - Company Appeal (AT) (Insolvency), Dated 14.09.2017 * the NCLAT held that the moratorium will not affect any proceedings initiated or pending before the Supreme Court under Article 32 of the Constitution of India or where an order is passed under Article 136. Further, it will not affect the powers of any High Court under Article 226 of the Constitution. * In the Power Grid Corporation of India Limited Vs. Jyoti Structures Limited [246 (2018) DLT 485], * the Delhi H....

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....do not include prosecution. * In the matter of Varrsana Ispat Limited Vs. Deputy Director, Directorate of Enforcement -NCLAT, Dated 02.05.2019 * The RP had sought de-attachment of properties attached with the Directorate of Enforcement under the Prevention of Money Laundering Act, 2002, a considerable time prior to the initiation of CIRP. The NCLAT had held that section 14 of the IBC is not applicable to the criminal proceeding or any penal action taken pursuant to the criminal proceeding or any act having the essence of crime or crime proceedings. * The Supreme Court also upheld the order passed by the NCLAT [Varrsana Ispat Limited Vs. Deputy Director, Directorate of Enforcement, Civil Appeal No. 5546 of 2019]. While the bar under IBC is automatic, practically the IRPs/RPs may need to file an application before various forums where proceedings against the CD is continuing, bringing to their attention the commencement of CIRP and the moratorium declared by the AA under section 14 of the IBC, and requesting the relevant forums to pass an order staying proceedings. * As per Section 14(1)(b) transferring, encumbering, alienating or disposing of by the corporate debtor any of ....

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....xplanation.- notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the moratorium period; Supply of essential goods or services [ Section 14(2) ] * The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. * The term "Essential Goods" is defined in regulation 32 of the CIRP Regulations as electricity, water, telecommunications services, and information technology services, to the extent that these are not a direct input to the output produced or supplied by the CD. * An example has been given of a case where ....

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....at Urja Vikas Nigam Ltd. Vs. Amit Gupta - NCLAT, Dated 15.10.2019 * the NCLAT upheld the order of the AA, setting aside the termination of the Power Purchase Agreement of the CD by the authority on the sole ground of initiation of CIRP of the CD. The AA held that in light of section 238 of the IBC, any terms of the PPA in direct contravention of the IBC could not be enforced. The NCLAT upheld the decision of the AA while acknowledging that the subsistence of the agreement was imperative to ensure that the CD was kept as a going concern. Prohibited Act [ Section 14(3) ] * The provisions of section 14(1) shall not apply to- * (a) such transactions, agreements or other arrangements as may be notified by the Central Government in consultation with any financial sector regulator or any other authority; * As per notification No. S.O. 2660 (E) - Dated: 14-6-2023 - IBC the corporate debtor has entered into any of the following transactions, arrangements or agreements, namely: - * (i) the Production Sharing Contracts, Revenue Sharing Contracts, Exploration Licenses and Mining Leases made under the Oilfields (Regulation and Development) Act, 1948 and rules made thereunder; and *....