CIRP Moratorium Under Section 14: What Stops and What Continues

What is the moratorium under section 14 of the IBC?

The moratorium is a statutory freeze on actions against a company that has been admitted into CIRP. The NCLT declares it in the admission order itself, and it binds everyone: banks, suppliers, landlords, government departments and courts. Its purpose is practical. A resolution professional cannot keep a company running, value it and invite buyers if creditors are racing each other to attach its bank accounts, auction its factory and take back its machines.

Think of it as calm water for the length of the CIRP. The Code gives the process 180 days, extendable by 90, with an outer limit of 330 days including time lost in litigation, and in practice many processes run longer. During all of it, the company stays alive as a going concern, but its assets are held together for the creditors as a group. A creditor's individual remedy is replaced by a collective one: you file a claim, the claim is verified, and you are paid under a resolution plan or, if that fails, in liquidation.

Two things the moratorium is not. It is not a discharge: the debt still exists, and it is dealt with in the resolution plan. And it is not a personal shield for the people behind the company. The Supreme Court made that clear years ago, and Parliament has since written it into the section.

What stops and what continues: a quick table

This is the short version. Each row is explained in the sections below.

One rule of thumb covers most cases: the moratorium protects the company and its property, not the people around it, and it blocks actions taken against the company, not actions taken by it.

When does the moratorium start and when does it end?

The moratorium starts on the insolvency commencement date, which is the date the NCLT admits the section 7, 9 or 10 petition. It does not start when the petition is filed. While a petition is pending, sometimes for months, creditors remain free to sue, execute and enforce security. That gap matters: a bank that takes symbolic possession under SARFAESI during that period has acted lawfully, though it cannot complete a sale once the moratorium begins.

The moratorium runs until the NCLT approves a resolution plan under section 31 or orders liquidation under section 33. It also ends when the CIRP itself ends for another reason: the petition is withdrawn under section 12A, or the NCLAT or the Supreme Court sets aside the admission order. If you are relying on the moratorium or waiting for it to lift, keep track of the appeal position, because an admission order set aside on appeal takes the moratorium with it.

After the moratorium, two different regimes take over. If a plan is approved, claims that were not part of the plan are extinguished, and the company comes out under new management with a clean slate. If the company goes into liquidation, section 33(5) carries a similar protection forward: no suit or legal proceeding can be filed by or against the company without the NCLT's leave, as our post on what happens to a company and its creditors in liquidation explains.

The four things section 14(1) prohibits

Section 14(1) lists four prohibitions. Read them closely, because most disputes about the moratorium turn on which clause applies.

Can a bank continue SARFAESI or DRT proceedings during the moratorium?

No, not against the company. Once the moratorium is in place, a bank cannot issue or act on a section 13(2) notice, take possession under section 13(4), seek the help of the CMM or DM under section 14 of SARFAESI, or hold an auction of the company's mortgaged property. A pending DRT original application against the company stops, and so does any recovery officer proceeding on a recovery certificate already issued against it.

What the bank does instead is file its claim as a secured financial creditor and sit on the committee of creditors. Its security does not disappear. It matters later, when the resolution plan is voted on and when distributions are worked out under section 30(2) or, in liquidation, under section 52 and 53. In practice the bank often has more influence inside the CIRP, through its vote, than it had outside.

There are two points where people go wrong. First, the stay protects the company's property, not the guarantor's. If the loan was also secured by the promoter's house, mortgaged in the promoter's own name as a third-party security, enforcement against that house is a separate question, and banks routinely pursue it. Second, an auction that was completed and confirmed before the insolvency commencement date generally stands. When Advocate B.K. Singh is asked to look at an auction that straddles the admission date, the first thing he checks is the exact date of the sale certificate against the date of the admission order, because the answer usually turns on that comparison. If you are dealing with SARFAESI steps against your own property rather than a company's, our post on whether you can stop a bank auction is more relevant.

Does the moratorium protect directors and guarantors?

No. The moratorium covers the corporate debtor only. In State Bank of India v V. Ramakrishnan (2018), the Supreme Court held that the section 14 moratorium does not protect a personal guarantor of the company's debt, and the Code was amended the same year to say so in section 14(3)(b). A bank can therefore continue its DRT case, its SARFAESI action over the guarantor's own property, or an insolvency petition against the personal guarantor under section 95, while the company is in CIRP.

The 2026 amendment to the Code adds an Explanation to section 14(3)(b) that works in the other direction. A surety who pays the creditor and then wants to recover from the company cannot start or continue proceedings against the company during the moratorium. The surety's route is the same as everyone else's: a claim in the CIRP. The approval of a resolution plan also does not release a guarantor; the Supreme Court said so in Lalit Kumar Jain v Union of India (2021), and the amended section 31 now records that claims against guarantors survive the plan.

Directors face their own exposure. Their personal guarantees, their liability in cheque cases, tax recovery against them in some situations, and later scrutiny of their conduct by the resolution professional all continue. Our posts on personal guarantor insolvency under section 95 and director liability after a company goes into insolvency deal with that side in detail.

What happens to a cheque bounce case against the company?

A section 138 case against the company itself is covered by the moratorium. In P. Mohanraj v Shah Brothers Ispat (2021), the Supreme Court held that a cheque bounce prosecution is a quasi-criminal proceeding whose real aim is recovery, and that it falls within section 14(1)(a). So the trial court cannot proceed against the company while the moratorium is in force.

The same judgment drew the line that matters for promoters: the natural persons arraigned under section 141 of the Negotiable Instruments Act, the directors in charge of the business and the signatories of the cheque, are not protected. Their trial continues. Many directors only discover this when the magistrate's court refuses to adjourn their case sine die, and they then have to deal with interim compensation or a conviction on their own.

For a creditor, this means a pending section 138 case still has value as a lever against the individuals, while the claim against the company goes to the resolution professional. For a director, it means insolvency is not a reason to stop defending the case. Our post on when directors are liable for a company's bounced cheque covers the defences that are actually available, such as a director who was not in charge of day-to-day business.

Other criminal cases, ED attachments and tax demands

Ordinary criminal prosecutions are not stayed by the moratorium. A cheating or criminal breach of trust FIR against the company and its officers, an SFIO investigation, or a GST evasion prosecution continues, because these punish an offence rather than recover a debt. What the moratorium affects is recovery dressed up as something else.

Attachment of the company's property by the Enforcement Directorate under the PMLA during CIRP has been contested before tribunals and courts, and the position is not uniform. Section 32A, inserted in 2019, gives clearer protection after the CIRP: once a resolution plan is approved and control passes to a new party that is not a promoter, related party or participant in the offence, the company is not liable for offences committed before the CIRP began, and its property cannot be attached for them. The individuals remain liable.

Tax and other government dues are claims like any other. A department cannot attach the company's bank account or garnishee its receivables during the moratorium. Courts have taken differing views on whether an assessment can be completed during the moratorium to quantify the demand, but there is no dispute that coercive recovery is barred. The department's remedy is to file its claim with the resolution professional, and departments that miss that step can find the demand wiped out by the plan.

Do suits, arbitrations and consumer cases stop?

Proceedings against the company stop, and proceedings by the company carry on. A supplier's money suit against the company, an arbitration in which the company is the respondent, and a consumer complaint against the company are all frozen. A suit or arbitration in which the company is the claimant continues, now conducted by the resolution professional, because recovering what others owe the company adds to the pool for creditors.

Mixed cases need care. Where the company is the claimant in an arbitration and the other side has a counter-claim, tribunals have generally let the company's claim proceed while the counter-claim against the company waits or is treated as a claim in the CIRP. Where an appeal is pending against a decree passed against the company, the company can pursue its own appeal, but the decree-holder cannot execute the decree.

Homebuyers see this most often. A consumer complaint or RERA complaint against a builder company in CIRP is stayed against the company, though complaints against directors or other group entities sometimes proceed. The practical step for a homebuyer is to file a claim in Form CA as a financial creditor in a class. Our post on what homebuyers can do when the builder is under insolvency covers that in detail.

Can a landlord, lessor or supplier cut off the company?

A landlord or lessor cannot recover possession of property the company occupies, under section 14(1)(d). That applies to office and factory premises, warehouses and leased machinery. But the moratorium is not a licence to occupy for free. Rent and lease charges for the period of the CIRP are generally treated as CIRP costs, which the resolution professional pays ahead of ordinary creditors. A landlord who is not being paid current rent should write to the resolution professional first and, if that fails, apply to the NCLT under section 60(5).

Suppliers of essential goods and services cannot terminate, suspend or interrupt supply during the moratorium because of old dues. Section 14(2) and regulation 32 of the CIRP Regulations treat electricity, water, telecommunication services and information technology services as essential, to the extent they are not a direct input to the company's output. Section 14(2A) goes further: if the resolution professional considers a supply critical to preserve the value of the company, it cannot be stopped, except where the dues for that supply during the moratorium are unpaid.

So the bargain is this. A supplier or landlord gives up the threat of disconnection for past dues, and in return current dues are paid as CIRP costs. Past dues go into a claim. A supplier who is not being paid for current supplies is entitled to stop, and should put that in writing to the resolution professional before doing so.

Can the company keep running and paying its bills?

Yes, and that is the point of the process. On admission, the powers of the board are suspended and management vests in the interim resolution professional, later the resolution professional. Section 20 requires the professional to manage the company as a going concern, and the professional can enter contracts, raise interim finance and pay current dues. Section 14(1)(b) does not stop ordinary trading; it stops the transfer or charging of assets outside the ordinary course.

Employees continue to work and are paid. Salaries for the period of the CIRP, for staff the resolution professional keeps on, are CIRP costs. Unpaid salary from before the commencement date is a claim, filed in Form D. Customers continue to receive goods. Suppliers can continue to supply on fresh terms, often cash on delivery, which the resolution professional usually accepts because the company cannot afford to stop.

Some decisions need the committee of creditors. Section 28 lists actions that the resolution professional can take only with the approval of 66% of the voting share, such as raising interim finance beyond a limit, creating security, changing the capital structure, transferring rights or making related party transactions. The 2026 amendment also allows the transfer of guarantors' assets during the CIRP with creditors' approval, under a new section 28A.

Your case against the company has been stayed: what to do next

If you are a creditor and the company you are suing has been admitted into CIRP, these are the steps, roughly in order.

1. Get the admission order and the public announcement

   Download the NCLT order from the tribunal's website and find the Form A public announcement published by the interim resolution professional in the newspapers. Note the insolvency commencement date, the professional's name and email, and the last date for claims.

2. Tell your trial court or arbitrator

   File a short application or memo placing the admission order on record in your pending case, so that it is adjourned rather than dismissed for non-prosecution. Keep the case alive; if the CIRP is set aside or withdrawn, you will want to resume it.

3. File your claim with the resolution professional

   Use the right form for your category of creditor and attach proof of the debt. This is now your main remedy. A claim filed late creates avoidable arguments about condonation.

4. Separate the claims against individuals

   List what you can still pursue outside the CIRP: guarantees, section 138 cases against directors and signatories, third-party security. These continue, and often bring the promoters to the table.

5. Watch for breaches

   If you see assets being moved, accounts being emptied or the company being run for someone else's benefit, put it in writing to the resolution professional and, if needed, apply to the NCLT. The moratorium binds the company and its management too.

6. Track the outcome

   Follow the CIRP through to a plan or liquidation. If a plan is approved, check how your class of creditor is treated. If liquidation is ordered, file again with the liquidator if required, and ask the NCLT for leave under section 33(5) before resuming any proceeding.

The commonest loss we see is not a weak case but a forgotten one: a creditor whose suit was adjourned sine die, who assumed the court would write to them, and who never filed a claim before the plan was approved.

Does the moratorium affect limitation?

Yes, in your favour. Section 60(6) says that when computing the limitation period for any suit or application by or against a corporate debtor for which a moratorium order has been made, the period of the moratorium is excluded. So if your time to file a recovery suit against the company was running when the CIRP began, the clock stops for the duration of the moratorium and resumes afterwards.

This exclusion helps where the CIRP is withdrawn or set aside and the company returns to its old management, because creditors who could not sue during the moratorium are not then shut out by delay. It does not extend time for claims against guarantors or directors, because the moratorium never stopped those claims in the first place. If you have a three-year limitation running against a guarantor under the Limitation Act, keep counting it as normal.

Limitation inside the CIRP is a different subject. The time for filing your claim with the resolution professional is fixed by the public announcement and the CIRP Regulations, not by section 60(6), and our post on filing your claim with the resolution professional deals with late claims.

What happens if someone breaches the moratorium?

An action taken in breach of the moratorium is treated as having no legal effect. A sale held by a bank after the commencement date, an attachment of the company's account by a department, or a decree passed against the company in a suit that should have been stayed can be set aside by the NCLT on an application by the resolution professional under section 60(5). The NCLT has wide power under that provision to decide any question arising in relation to the insolvency of the company.

The 2026 amendment added a separate penalty provision, section 67B, for contravening the moratorium, aimed both at the company's officers and at creditors who act against it. The penalties are substantial and are imposed in addition to the act being undone. Check the current notification status of this provision before relying on it in a particular case.

When Advocate B.K. Singh acts for a resolution professional or a creditor on a moratorium breach, the advice is to move quickly and with documents: the admission order, proof that the other side knew of it, and the exact step taken after the commencement date. A breach that is challenged within days is usually undone cleanly. One that is left for months, after the property has passed to a third party, becomes far more difficult.

Mistakes creditors and promoters make with the moratorium

• Assuming the moratorium starts on filing. It starts on admission. A creditor who stops its SARFAESI or DRT steps the day a petition is filed loses months of lawful action.
• Assuming it protects the promoters. Guarantors, directors and signatories remain exposed in the DRT, under SARFAESI against their own property and in section 138 trials.
• Letting a stayed case die. Put the admission order on record and ask for an adjournment sine die. A case dismissed for non-prosecution is harder to revive if the CIRP ends early.
• Not filing a claim because a case is pending. A pending suit or arbitration is not a claim in the CIRP. Only a claim filed with the resolution professional is counted.
• Cutting supply over old dues. Disconnecting an essential or critical supply for pre-commencement dues breaches the moratorium. Stop supply only for unpaid current dues, and only after writing to the professional.
• Moving assets after admission. Promoters who transfer stock, vehicles or property to related parties after the commencement date invite reversal by the NCLT and, under the 2026 amendment, penalties.
• Ignoring the appeal. If the admission order is challenged before the NCLAT and set aside, the moratorium falls with it, and creditors who were waiting need to restart their cases at once.

Checklist for a creditor in the first week of a moratorium

• Copy of the NCLT admission order with the insolvency commencement date
• Form A public announcement: professional's name, email and last date for claims
• List of every pending case against the company, with court, case number and next date
• List of every claim you hold against guarantors, directors and third-party security providers
• Your ledger, invoices, agreements, decree or award, and bank statements showing the debt
• Interest calculation up to the insolvency commencement date only
• Correct claim form for your category (Form B, C, CA, D or F)
• Note of current supplies or services you continue to provide, and the payment terms agreed with the professional
• Any evidence of assets being moved or the company being run for a related party

When to go to the NCLT, and when not to

Go to the NCLT when the moratorium is being misused against you or by someone else: a landlord whose current rent is not being paid, a supplier whose current invoices are ignored while it is told it cannot stop supply, a creditor who sees assets leaving the company, or a resolution professional facing a bank or department that refuses to respect the stay. Section 60(5) applications are heard by the same bench that admitted the petition, and the NCLT benches in New Delhi list them regularly.

Do not go to the NCLT to fight the moratorium itself. Applications asking the tribunal to let one creditor carry on its suit or enforce its security against the company, simply because its case is strong, almost always fail. The Code's design is collective, and the tribunal protects it. The better use of effort is a well-documented claim, an active role in the committee of creditors if you have a vote, and pressure on guarantors where you have it.

If you want an advocate to read the admission order against your pending cases and tell you which ones are stayed, which continue and what the deadlines are, the team of Advocate B.K. Singh at B.K. Singh & Associates can look at the papers through our online legal enquiry. More about how we handle tribunal work is on our NCLT lawyer in Delhi page, and the wider practice on our insolvency lawyer in Delhi page.