Interim Moratorium Under Section 14 Of The Insolvency And Bankruptcy Code: An Evolving Jurisprudence

One of the defining features of the Insolvency and Bankruptcy Code, 2016 ("IBC") is the moratorium under Section 14, which comes into effect upon admission of an application for initiation of the Corporate Insolvency Resolution Process (“CIRP”) for corporate persons. The moratorium serves as a statutory calm period, protecting the corporate debtor from enforcement actions while enabling the resolution professional to preserve the debtor's assets and maximise value.

However, the IBC is conspicuously silent on the period between the filing of an insolvency application and its admission. This gap has given rise to an important question: Can the Adjudicating Authority grant any interim protection against the assets of the corporate person/s before admitting a CIRP application?