TaxTMI 
TaxTMI 
2026 (4) TMI 1517
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.... consequently, the existence of interim moratorium under Section 96 of the IBC. It is claimed that the applications were rejected by the impugned orders on irrelevant considerations. 2. In this petition, the petitioners also moved an interim application seeking urgent interim relief, in the light of the fact that respondent No. 1 - bank (secured creditor) had already proceeded under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Securitisation Act), as a consequence of which auction of the secured assets was conducted and sale certificate was issued in favour of respondent Nos. 2 and 3. On 14.01.2026, this Court took into account the submissions made on behalf of the petitioners as well as respondent No. 1 - bank, in the backdrop of the provisions of IBC and National Company Law Tribunal Rules, 2016 (NCLT Rules) and judgement of this Court in the case of Bank of Baroda vs. Union of India and another (2024 SCC OnLine Bom 3964). It was found that even if the interim moratorium could not have been triggered by mere filing of the petition on 09.07.2025 before the NCLT under Section 95 of the IBC, the docume....
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....ming that the moratorium had been triggered. 7. On 21.08.2025, the Court Commissioner appointed by the competent Magistrate issued notice for taking physical possession of the aforesaid secured assets. As per notice dated 16.09.2025, physical possession of the said property was taken and handed over to the respondent No. 1 - bank, which issued a sale notice dated 30.09.2025, specifying 24.10.2025 as the date of auction of the said properties. On 24.10.2025, the auction sale was conducted and respondent Nos. 2 and 3 were the successful auction purchasers. On 10.11.2025, the petitioners filed the aforesaid interim applications, seeking restoration of possession of the secured assets as also stay to the steps taken by respondent No. 1 - bank under the Securitisation Act and a prayer was also made for setting aside auction sale conducted on 24.10.2025. 8. In the interregnum, the petition filed under Section 95 of the IBC before the NCLT was registered on 04.11.2025 and by an order dated 14.11.2025, the NCLT appointed a resolution professional and recorded that interim moratorium had commenced from the date of filing of the petition. The aforesaid interim applications filed by the....
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....and scrutiny of petitions, such issues would have to be considered by the DRT afresh and therefore, the impugned orders deserve to be set aside. It was submitted that the petitioners cannot be made to suffer due to the manner in which the petitioner before the NCLT pursued the proceedings and the errors, if any, committed by the Registry of the NCLT, while scrutinizing the petition filed under Section 95 of the IBC. It was submitted that even if Rule 28 of the NCLT Rules is taken into account, in the backdrop of the directions issued by this Court in the case of Bank of Baroda vs. Union of India and another (supra), the petitioners could certainly not be blamed for any error or default in scrutiny and registration of the petition by the Registry of the NCLT. 12. It was submitted that in any case, on 04.11.2025, the petition before the NCLT was registered and at least from that date, the interim moratorium had been triggered. This was the very ground on which this Court found a prima facie case in favour of the petitioners, while granting status quo. On this basis, it was submitted that this Court may consider setting aside the impugned orders and directing that in the face of th....
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....to be dismissed. It was submitted that the third party, which had filed the said petition before the NCLT, had not taken recourse to Rule 63 of the NCLT Rules and therefore, the directions issued by this Court in the case of Bank of Baroda vs. Union of India and another (supra), stood violated, thereby indicating that the interim moratorium could not have been triggered. 15. We have considered the rival submissions in the light of the aforementioned chronology of events and the documents on record, particularly the report submitted by the Assistant Registrar, NCLT and copy of the SOP framed by the NCLT with regard to filing and scrutiny of petitions. 16. A perusal of the impugned orders shows that the DRT proceeded to reject the aforesaid interim applications filed by the petitioners, primarily on the ground that intimation regarding filing of petition before the NCLT was not sent on proper email id of respondent No. 1 - bank and that the same was not brought within the knowledge of the said respondent by the petitioners, even when sale notice and public notices were issued with regard to the auction sale of the secured assets. 17. A perusal of Section 96 of the IBC shows ....
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....ighlighted the extreme delay in compliance with objections and further delay in declining of matters for non-compliance by Respondent 2 which has resulted in the interim moratorium continuing against the personal guarantors for an extremely unreasonable period of time. This, In turn, hampers recovery proceedings for the banks and financial Institutions such as the petitioner.' 19. Thereafter, in the aforesaid judgement, this Court took note of the deliberate delay in scrutiny and processing of petitions filed before the NCLT under Section 94 or 95 of the IBC for taking advantage of interim moratorium and after referring to Sections 94 to 96 of the IBC, as also Rule 28 of the NCLT Rules pertaining to endorsement and scrutiny of petition or appeal or document, issued the following directions: '13. In order to address the issue pertaining to delay in compliance with Rule 28 of NCLT Rules and to ensure that the scheme of the provisions pertaining to personal guarantors is not defeated by an extended interim moratorium, to streamline the procedure and to ensure expeditious listing of the matters before the Tribunal, the following timelines and process are being laid down to ....
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....e purposes of Section 96 IBC. The same shall be Ignored and no cognizance shall be taken of the same.' 20. The above-quoted portions of the said judgement indicate the concern expressed by this Court with regard to the manner in which such petitions filed under Section 94 or 95 of the IBC, were deliberately kept pending at the stage of scrutiny, only to take advantage of the interim moratorium triggered under Section 96 of the IBC. 21. In this context, the SOP framed by the NCLT for Rules 28 and 63 of the NCLT Rules dated 19.03.2025, also assumes significance. It would be appropriate to quote the said SOP in its entirety, which is as follows: National Company Law Tribunal Date: 19.03.2025 Fresh Matter filed:- 1. A Party filing any Petition/Application/Documents in the e-filing portal of NCLT will be provided with a filing/diary number. 2. The Petition/Application/Documents so filed, will be scrutinized by the Registry and will be registered if it is free of from any defect 1st Defect Notice Issued:- 3. However, if there are defects in the Petition/Application/Documents, then the same will be intimated to the party concerned v....
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.... Court in the case of Bank of Baroda vs. Union of India and another (supra) and the SOP framed by the NCLT, would show that a step-wise process is to be followed by the Registry of the NCLT, while scrutinizing the petitions. It is also clear that mere filing of a petition under Section 94 or 95 of the IBC before the NCLT, does not trigger interim moratorium under Section 96 thereof and that the interim moratorium is triggered only after the petition is registered and the procedural rigmarole provided under the directions of this Court as well as the aforementioned SOP, is properly undertaken. 23. In the present case, it is found that the third party filed the petition under Section 95 of the IBC against petitioner No. 2 for initiating Insolvency Resolution Process on 09.07.2025. As per the report submitted by the Assistant Registrar, NCLT, upon scrutiny of the petition, 5 defects were found therein and the same was returned to the third party petitioner on 24.07.2025 for curing the said defects. As per the directions issued by this Court in paragraph No. 13 of its judgement in the case of Bank of Baroda vs. Union of India and another (supra) and clause 4 of the SOP, the said thi....
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....sed by the NCLT, the resolution professional was appointed and it was noted that an interim moratorium was operating under Section 96 of the IBC from the date of filing of the petition. 27. We find that in terms of the directions issued by this Court in the case of Bank of Baroda vs. Union of India and another (supra), the interim moratorium stood triggered only when the petition was registered i.e. on 04.11.2025 and not from the date of the filing of the petition i.e. 09.07.2025. The facts noted hereinabove from the report submitted by the Assistant Registrar of the NCLT indeed shows a sad state of affairs. It is obvious that the Registry of the NCLT in the present case, concerning the petition filed by the third party petitioner under Section 95 of the IBC, failed to follow and comply with directions contained in paragraph 13 of the judgement of this Court in the case of Bank of Baroda vs. Union of India and another (supra), as also the clauses of the SOP framed by the NCLT itself. It is to be noted that the aforesaid directions were issued by this Court in the context of the Rule 28 of the NCLT Rules pertaining to endorsement and scrutiny of petitions and documents. 28. Th....
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....between the petitioners and the third party petitioner before the NCLT can best be examined by the NCLT, in the event respondent No. 1 bank and respondent Nos. 2 and 3 auction purchasers choose to approach the NCLT for a direction that the interim moratorium would not operate against them. As regards the steps taken in accordance with law by the respondent No. 1 bank (secured creditor), this Court in any manner holding that the interim moratorium would not apply due to the grave procedural irregularities in the Registry of the NCLT, would adversely affect the third party petitioner also, who has filed the petition before the NCLT, even when it is not a party in the present writ petition. Even if this Court were to consider the contention of connivance between the petitioners and the third party raised on behalf of the respondent No. 1 bank, or the allegation that the scrutiny of the petition before the NCLT was deliberately held up and kept in hibernation, findings thereon would affect the said third party petitioner, who is not a party before this Court. 30. It is in this backdrop that we find substance in the contention of the petitioners that the DRT, in the present case, sho....