Interim Moratorium Protects Personal Guarantors from Legal Actions, Halts SARFAESI Proceedings, Allows Asset Protection.

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Full Text of the Document

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....From perusal of Section 96(1)(b) of IBC, 2016, interim moratorium restrains ongoing or fresh legal action or proceeding regarding debt pertaining to personal guarantor, not security interest created by personal guarantor. No moratorium on bank dealing with security interest. Personal guarantor can approach appropriate forum like DRT to protect assets. Section 96(1)(b) deems legal action or proceeding pending regarding debt stayed upon interim moratorium commencement u/s 96. Bank cannot continue SARFAESI proceedings once IBC proceedings commenced as per Section 238's overriding effect. No sale process commenced regarding mortgaged property. Remedy available under SARFAESI, High Court ought not entertain writ petitions. Bank cannot proceed un.........