Part 4 of 8 · Moratorium & Interplay with Other Laws

Yes, as held in this case — despite their quasi-criminal character, such proceedings carry a substantial civil liability element and fall within the moratorium's scope.

The moratorium is meant to give the corporate debtor a calm period free from all actions that could deplete its assets or divert management attention — allowing a civil-recovery-flavoured proceeding to continue would undermine that purpose.

Because the Section 138 complaints were pending before a criminal court, and the corporate debtor sought a stay of those proceedings — when the High Court declined to grant a blanket stay, the question of the moratorium's scope was escalated to the Supreme Court for a definitive ruling.

P. Mohanraj widens the moratorium's coverage to include NI Act proceedings against the corporate debtor itself, while SBI v. Ramakrishnan narrows it by excluding personal guarantors — together they show the moratorium tracks the corporate debtor specifically, regardless of the form of proceeding, but does not extend to third parties like guarantors.

A clause that treats the mere commencement of insolvency proceedings as an event of default, entitling the counterparty to terminate regardless of actual performance. The Court restrained enforcement of such a clause here, since termination would have destroyed the corporate debtor's sole viable business.

Section 60(5)(c) of the IBC, which gives NCLT jurisdiction over any question of law or fact arising out of or in relation to the insolvency resolution process of the corporate debtor.

No — it extends to disputes that arise out of or have a nexus with the insolvency resolution process itself; purely independent contractual disputes unconnected to CIRP would fall outside this jurisdiction.

Because its termination would have left the corporate debtor with no viable business to resolve, directly undermining the Code's objective of resolution as a going concern — making this a matter intimately tied to the success of CIRP itself, not a standalone contractual grievance.

It can only determine/quantify the customs duty and dues payable; it cannot independently confiscate, detain, or sell the goods to recover those dues.

The liquidator, who has exclusive jurisdiction over the liquidation estate under Section 33(5) — the goods remain part of that estate, and the Customs Department must claim through the Code's process rather than act unilaterally.

By lodging a claim in the liquidation process and receiving payment in accordance with its ranking under the Section 53 waterfall, rather than through independent recovery action under the Customs Act.

That Section 238's overriding effect subordinates specialised recovery mechanisms in other laws (here, the Customs Act) to the unified insolvency/liquidation process once it has commenced — consistent with the Code's design to prevent piecemeal asset erosion.

No — the Supreme Court held deposits of defrauded investors under the MPID Act do not constitute a "debt" in the SARFAESI sense, so the usual secured-creditor priority provisions do not override an MPID attachment.

No — such properties, having already vested in the state-appointed Competent Authority prior to the moratorium, are not treated as part of the corporate debtor's insolvency estate, so they remain available for execution notwithstanding the moratorium.

Because it found no genuine conflict between the MPID Act and the IBC on these facts — properties already validly attached and vested outside the corporate debtor's estate before the moratorium began simply fall outside the scope of what the moratorium protects, so there was nothing for Section 238 to override.

Innoventive Industries involved a genuine, direct conflict between a state law suspending liabilities and the IBC's insolvency trigger mechanism, resolved by applying Section 238's overriding effect. This case shows that the overriding-effect analysis is only reached where such a conflict actually exists — here, careful analysis of timing and vesting showed there was no real conflict at all, so the two statutes simply operated in separate spheres.

No — the Supreme Court held the IBC does not provide an indirect route to question a sovereign act validly undertaken under a penal statute like the Benami Act; such property, once confiscated under Section 27, vests absolutely in the Central Government and falls outside the liquidation estate.

No — the moratorium is intended to protect the corporate debtor from creditor actions aimed at debt recovery, not to shield tainted assets from sovereign action against crime under a separate penal statute.

No — Section 32A is event-based, triggered only upon approval of a resolution plan or completion of a liquidation sale to an unconnected third party; absent that triggering event, it does not validate defective title or convert benami property into a corporate debtor asset.

An ostensible holder (benamidar) holds property in name only, without being its real beneficial owner. Because such property never genuinely belonged to the corporate debtor, it never formed part of its estate under Section 36 of the IBC to begin with — there is nothing for the liquidator to administer or distribute in respect of it.

No — the NCLAT held PMLA relates to a distinct penal domain (proceeds of crime and money-laundering), so Section 14 of the IBC is not applicable to such proceedings.

Because Section 14 only protects assets from the point CIRP commences onward — an attachment that had already occurred before that point could not be retroactively unwound by the later-arising moratorium.

It was expressly disapproved by a larger NCLAT bench in Kiran Shah, RP of KSL and Industries Ltd. Vs. Enforcement Directorate, Kolkata, which held it was decided contrary to the principle of stare decisis and reaffirmed Varrsana Ispat as the correct position.

Under Article 141 of the Constitution, the NCLAT's decision stood merged with the Supreme Court's dismissal order and became binding law across all courts and tribunals in India.

No — the Delhi High Court held the ED's PMLA attachment power is unaffected by Section 14 regardless of whether the attachment occurs before or after CIRP commencement.

Because attachment does not extinguish or expunge property rights — it is a symbolic, temporary taking-over of the property pending the conclusion of PMLA proceedings, rather than a genuine transfer or alienation that would deplete the corporate debtor's asset pool in the way Section 14 is designed to prevent.

49 accounts, out of 74 initially frozen by the Enforcement Directorate.

In Varrsana Ispat, the PMLA attachment occurred before CIRP commenced; here, it occurred after. The distinction matters because it tests whether the non-applicability of Section 14 to PMLA proceedings depends on timing — this case confirms it does not, extending the principle to cover post-CIRP attachments as well.

Whether the underlying criminal investigation predates the commencement of CIRP — if it does, and the attachment is later confirmed by the PMLA Adjudicating Authority, the attachment does not violate the moratorium, even if the formal attachment order itself was issued after CIRP began.

No — such assets, once under adjudication or confirmation by the competent PMLA authority, cannot be claimed as part of the freely available insolvency/resolution estate.

No — the NCLAT held that PMLA is a public law statute whose disputes fall outside the jurisdiction of the insolvency tribunals.

Rajiv Chakraborty held broadly that the timing of the ED's attachment order (before or after CIRP) doesn't affect the outcome. This case refines that by clarifying the more precise underlying test: what matters is whether the criminal investigation itself began before CIRP, even if the formal attachment order is issued afterward — a more specific evidentiary inquiry than simply looking at the attachment order's date.

No — the Delhi High Court held that since termination predated the moratorium, Section 14 did not bar the lessors from pursuing deregistration.

No — that function belongs exclusively to the DGCA, subject to judicial review by the High Court under Article 226; it falls outside NCLT's insolvency jurisdiction under Section 60(5).

A notification dated 4 October 2023 exempting transactions relating to aircraft, aircraft engines, airframes, and helicopters from Section 14(1) of the IBC entirely — implementing India's Cape Town Convention obligations — and the Court held this exemption applied even to pending cases like Go First's.

It directed the DGCA to process deregistration of all 54 aircraft leased to Go First within five working days, and directed the Resolution Professional to provide lessors with up-to-date information on the aircraft.

It held that spectrum constitutes an intangible asset of the licensee, amenable to insolvency proceedings, relying on its accounting treatment as an intangible asset.

No — it held such dues could not be white-washed, and that spectrum licences could not be transferred without payment of the overdue amounts, even though it had classified spectrum as a transferable IBC asset.

If spectrum is genuinely an "asset" available for acquisition under the IBC framework (as the first two findings suggest), it is inconsistent to then say dues attached to it cannot be cleared/extinguished the way other creditor claims are under the clean-slate doctrine — the NCLAT did not reconcile this tension.

In a related matter on Adjusted Gross Revenue (AGR) dues (Union of India Vs. Association of Unified Telecom Service Providers of India), the Supreme Court had directed that these spectrum-related insolvency questions be considered by the NCLAT first.

No — the Court held spectrum usage rights are not "owned" assets within the meaning of Sections 18 and 36 of the IBC, so their regulation does not fall within the IBC's purview at all.

The NCLAT had treated spectrum as an intangible "asset" under Section 18(f) but then inconsistently held it couldn't be freely transferred or cleared of dues; the Supreme Court resolved this by holding spectrum isn't an IBC asset at all, removing the need to even reach the Section 238 overriding-effect question.

Because it held spectrum falls outside the IBC's scope entirely — if there's no genuine overlap between the IBC and telecom-sector regulation of spectrum in the first place, there's no conflict for Section 238's overriding effect to resolve.

That the threshold question — whether the disputed asset or right falls within the IBC's scope at all — must be answered before even reaching a Section 238 overriding-effect analysis; not every regulated resource touching a corporate debtor's business is automatically part of its insolvency estate.

As ordinary claims to be resolved within the resolution plan/CIRP claims framework — not recovered independently through direct governmental action outside that process.

As Insolvency Resolution Process Costs, payable with priority, since they relate to the RP's continued operation of the mine as a going concern during CIRP.

Because allowing this would create a discriminatory arrangement not contemplated by the Code, effectively letting one creditor bypass the collective insolvency process that binds all other creditors and claims.

The Mines and Minerals (Development and Regulation) Act, 1957, and the Coal Mines (Special Provisions) Act, 2015.

No — because the State had expressly asserted its secured status well before the plan was approved, the Tribunal treated the plan's failure to account for it as a genuine defect requiring correction, not a settled matter being improperly reopened.

No — the NCLAT held the IBC and such state tax law frameworks co-exist harmoniously; the statutory first charge is not displaced, and the State Tax Department retains its secured creditor status.

This case frames the relationship as harmonious co-existence between the IBC and state tax law; Paschimanchal Vidyut instead found Section 238 overrides certain statutory charges for waterfall purposes — a difference in reasoning that shows this area remains genuinely unsettled rather than governed by one uniform rule.

Asserting a secured claim clearly and early — well before plan approval, as the State did here in its 2021 reply — strengthens the argument that a plan's later failure to account for that claim is a correctable defect rather than a settled issue that cannot be revisited.

No — such adjustments during CIRP violated the Section 14 moratorium and were declared void and refundable with interest.

No — once a bank guarantee is validly invoked before CIRP begins, the underlying margin money ceases to form part of the corporate debtor's estate and is not refundable, unlike ordinary protected assets such as the corporate debtor's shares.

No — Section 238's overriding effect was held to override Sections 55-56 of that Act; the Act's exclusion of Companies Act applicability does not similarly exclude IBC jurisdiction.

Because the approved plan had already extinguished pre-CIRP liabilities not addressed within it under Section 32A; the bank had no continuing right to unilaterally recover against dues that had already been extinguished.