Moratoriums under Sections 14 and 96 of IBC against corporate and personal guarantors do not bar recovery proceedings against principal borrower with no insolvency proceedings initiated against it, due to co-extensive but independent liabilities.

JUDGMENT :

GAURI GODSE, J.

1. This summary suit is filed to recover a sum of Rs. 203,66,31,506/- arising out of and in respect of the term loan facilities, availed by defendant no.1 and guaranteed by defendant nos. 2 to 4. Pursuant to a query made by the court as recorded in order dated 17^th September 2025, in the summons for judgment, an additional affidavit is filed by the plaintiff to place on record the order dated 20^th August 2019, passed by the National Company Law Tribunal (“NCLT”), Mumbai Bench under Section 7 read with Section 14 of the Insolvency and Bankruptcy Code 2016 (‘IB Code’) against defendant no.2. The plaintiff has also placed on record copy of the case status of petition filed against defendant nos. 3 and 4 before the NCLT, which refers to the order against defendant no.3. A separate order under Section 95 under the IB Code against defendant no.4 is also placed on record.

2. Learned counsel for the plaintiff submitted that despite the said orders, the summons for judgment can proceed qua defendant no.1, who is the principal borrower. Hence, the plaintiff has filed the additional affidavit stating that the plaintiff seeks to proceed only against defendant no. 1 at this stage and shall not press any interim relief against defendant nos. 2 to 4 at this stage, by reserving the right to proceed after the moratorium ceases to operate against them.

3. Heard learned counsel for the plaintiff on this preliminary point. None appeared for the defendants, though served.

4. The plaintiff is a non-banking financial company engaged in financial and advisory services. Defendant no.1 is a company incorporated and registered under the provisions of the Companies Act, 1956. Defendant no.1 has been arrayed in the present summary suit in its capacity as the borrower pursuant to the facilities availed by it from the plaintiff. Defendant no.2 is a company incorporated and registered under the provisions of the Companies Act, 1956 and is the Corporate Guarantor. Defendant nos. 3 and 4 are the personal guarantors. Defendant nos. 2 to 4 have been arrayed in the summary suit in their capacity as guarantors to the facilities availed by defendant no.1 from the plaintiff.

5. By an Order dated 20^th August 2019, passed by the NCLT and confirmed by the NCLAT by order dated 13^th July 2020, a moratorium under Section 14 of the IB Code has come into effect against defendant no. 2. On 18^th December 2021, applications under Section 95 of the IB Code were filed against defendant nos. 3 and 4. Consequently, an interim moratorium under Section 96 of the IB Code has come into effect. The company petition against defendant no. 3 was reserved for orders on 24^th July 2025. The Company Petition against defendant no. 4 is sub judice.

6. Learned counsel for the plaintiff submitted that Section 96 of the IB Code is part of Part III of the IB Code, which applies to matters relating to individuals and partnership firms, in terms of Section 78 of the IB Code. The provisions of the moratorium contained in Section 96 of the IB Code woul