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2026 Supreme(Online)(NCLAT) 512
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Mohammad Faiz Alam Khan (Member(Judicial)) , Mr. Naresh Salecha (Member (Technical)) ,
MR. MOHIT ARORA – Appellant
Versus
PNB HOUSING FINANCE LTD. – Respondent
4668/ND/2024 IA
A petition filed under Section 95 of the IBC during a valid interim moratorium is void ab initio and cannot itself trigger a fresh moratorium, making a later petition filed during that void proceeding maintainable.
Headnote:
(A) Insolvency and Bankruptcy Code, 2016 - Sections 94, 95, 96, 99, 100, 101 and 133 - Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019 - Rule 7(1) - NCLT Rules, 2016 - Rule 11 - Interim moratorium under Section 96 commences on the date of application and ceases on the date of admission - The moment an application is filed under Section 94 or 95, an interim moratorium comes into effect, prohibiting the initiation or continuation of any legal action in respect of any debt. (Paras 29-30)
(B) Insolvency and Bankruptcy Code, 2016 - Section 96 - Interpretation - The interim moratorium is a statutory moratorium that flows from the filing of the application, not from any judicial order - An application filed during the currency of an interim moratorium from a prior valid application is non-est in law. (Para 43)
(C) Insolvency and Bankruptcy Code, 2016 - Section 96 - Maintainability of subsequent petition - A petition under Section 95 filed during the pendency of an interim moratorium triggered by a pre-existing, valid Section 95 petition is not maintainable and is void ab initio. (Paras 41-43)
(D) NCLT Rules, 2016 - Rule 11 - Inherent Powers - The Tribunal has inherent powers to make orders as may be necessary for meeting the ends of justice or to prevent abuse of the process, including nullifying a fraudulently obtained or abused moratorium. (Para 53) (E) Contract Act, 1872 - Section 133 - A guarantee is not discharged if the change in the constitution of the borrower is already contemplated in the deed of guarantee. (Paras 46-47) (F) Insolvency and Bankruptcy Code, 2016 - Sections 95 and 96 - Conduct of litigant - A litigant must disclose all material facts; non-disclosure of parallel proceedings amounts to abuse of process and material concealment of fact. (Paras 55-56)
Facts of the case:
The appellant, a personal guarantor to a corporate debtor, defaulted on a loan. The respondent financial creditor filed a petition (CP IB No. 203/2021) under Section 95 of the IBC on 26.03.2021. This petition was withdrawn on 08.07.2021 with liberty to file afresh. Meanwhile, another creditor (IFCI) filed a petition (CP IB No. 428/2021) on 02.06.2021 against the same guarantor. On 24.07.2021, the respondent filed a second petition (CP IB No. 395/2021). The Adjudicating Authority admitted the second petition, which was challenged by the guarantor on the ground that it was filed during the interim moratorium triggered by the IFCI petition.
Findings of Court:
The NCLAT held that the IFCI petition (CP IB No. 428/2021) was filed on 02.06.2021 during the interim moratorium commenced by the earlier valid PNB petition (CP IB No. 203/2021). Therefore, the IFCI petition was non-est in law and could not itself commence an interim moratorium. Consequently, the second PNB petition (CP IB No. 395/2021) was not barred by any moratorium and was maintainable.
Issues: 1. Whether a second petition under Section 95 of the IBC is maintainable if filed during the pendency of an earlier petition under Section 95 filed by another creditor? 2. Whether an interim moratorium triggered by a petition that itself was filed during the currency of a prior interim moratorium is valid? 3. Whether the Adjudicating Authority could exercise its inherent powers to nullify a moratorium that was claimed to be based on concealment of facts?
Ratio Decidendi: A petition filed during a valid interim moratorium is non-est from its inception. A non-est petition cannot trigger a fresh interim moratorium. Therefore, a subsequent petition filed during the pendency of such a void petition is not barred, as the void petition did not create any valid moratorium. The Adjudicating Authority's use of inherent powers to prevent abuse of the process (for non-disclosure of proceedings) was upheld.
Result: Appeal dismissed. The impugned order admitting the petition under Section 95 was upheld. No order as to costs. (Paras 59-61)
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| 1. the court established the factual background of the appeal, including the corporate debtor's default and the filing of the section 95 petition against the personal guarantor. (Para 1 , 2 , 3 , 4) |
| 2. the appellant argued that the second section 95 petition was filed during the interim moratorium triggered by an earlier ifci petition, making it non-maintainable. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19) |
| 3. respondents argued that the appellant's conduct, including concealment of proceedings, should bar his objections. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27) |
| 4. the court analyzed section 96 and held that the ifci petition was non-est because it was filed during the interim moratorium triggered by the pnb's earlier petition. (Para 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43) |
| 5. the court rejected the appellant's arguments regarding discharge of guarantee and abuse of process. (Para 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56) |
| 6. the court concluded that the second pnb petition was maintainable and the appeal was dismissed. (Para 57 , 58 , 59 , 60 , 61) |
J U D G M E N T
(Hybrid Mode)
[Per: Justice Mohd. Faiz Alam Khan, Member (Judicial)]
1.The instant appeal has been preferred by Mohit Arora –Appellant Guarantor against the impugned order dated 11.10.2022, passed by the Ld. National Company Law Tribunal, New Delhi, Bench Court-II (Adjudicating Authority) in IA No. 4750/ND/2021 in CP No. (IB) 395(ND)/2021 whereby the Ld. Adjudicating Authority has admitted the petition filed by the Respondent No. 1 under Section 95 of the Insolvency and Bankruptcy Code, 2016 (Code).
Factual Matrix
2. Facts of this appeal in brief are that Respondent-PNB Housing Finance Ltd. has sanctioned loan facilities totalling Rs. 275 Crores vide sanction letter dated 04.01.2017 in favour of Supertech Ltd. (Corporate Debtor) and the terms and condition of the sanction letter was stated to be modified vide sanction letter dated 08.03.2017 and the loan agreement was executed on 10.03.2017 between the CD along with its co-borrowers namely Sarv Realtors Pvt. Ltd. and ASP Sarin Realty Pvt. Ltd. and Mr. Mohit Arora along with Mr. RK Arora and Ms. Sangita Arora who had provided their personal guarantees in favour of the creditor to secure these credit facilities availed by the CD.
3. It is further reflected that the CD has defaulted in payment of the monthly instalment due and payable to the creditor on various dates and the creditor served a demand notice under Section 13 (2) of the SARFAESI Act, 2002 on the CD and the personal guarantors demanding repayment of complete outstanding amount of Rs. 279.20 Crore along with future interest.
4. The creditor has also issued demand notice dated 09.07.2021, in requisite Form-B as required under Rule 7 (1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019 (PG to CD Rules, 2019), demanding the total outstanding debt of Rs. 358.91 Crore and it is stated that no reply to this notice was given by the guarantor and consequently petition under Section 95 of the Code was presented before the Ld. Adjudicating Authority who after appointment of the RP and after considering its report as well as after hearing the submission of Ld. Counsel for the parties admitted the application by passing impugned order which has been assailed by the appellant by filing the instant appeal.
Submissions of parties
5. Ld. Counsel for the appellant submits that the Ld. Adjudicating Authority has committed an legality in admitting the petition filed by the financial creditor on the ground that the petition filed by the PNB under Section 95 of the IBC was filed during the commencement of the interim moratorium initiated on the filing of a petition under Section 95 IBC by the another creditor IFCI being CP (IB) No. 428(ND)/2021 on 02.06.2021 while the petit
