This consolidated judgment addresses multiple writ petitions filed by various secured creditors challenging orders from the Debts Recovery Tribunal (DRT) and seeking clarification on the retroactive application of Section 96(4) of the Insolvency and Bankruptcy Code, 2016 (IBC). This amendment, effective from May 26, 2026, aims to exclude personal guarantors to corporate debtors from the interim moratorium provisions of Section 96 of the IBC. The central legal question is whether this amendment applies retroactively to pending insolvency proceedings or only prospectively. Debtors and personal guarantors had been misusing the interim moratorium under Sections 94/95 of the IBC to frustrate legitimate recovery actions by creditors.
Sub-section (4) to Section 96 of the IBC was introduced by amendment, effective from May 26, 2026, stating that the interim moratorium provisions shall not apply where an application is filed for initiating an insolvency resolution process in respect of a personal guarantor to a corporate debtor.
Creditors argued that the amendment should apply retroactively to address the rampant misuse of interim moratorium under Section 96 of the IBC by unscrupulous debtors/guarantors.
Debtors/guarantors argued for prospective application, claiming the interim moratorium was a substantive or 'vested right' that could not be taken away by the amendment.
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Debts Recovery Tribunal-I, Mumbai, restrained…
Indian Bank conducted…
This consolidated judgment addresses multiple writ petitions filed by various secured creditors challenging orders from the Debts Recovery Tribunal (DRT) and seeking clarification on the retroactive application of Section 96(4) of the Insolvency and Bankruptcy Code, 2016 (IBC). This amendment, effective from May 26, 2026, aims to exclude personal guarantors to corporate debtors from the interim moratorium provisions of Section 96 of the IBC. The central legal question is whether this amendment applies retroactively to pending insolvency proceedings or only prospectively. Debtors and personal guarantors had been misusing the interim moratorium under Sections 94/95 of the IBC to frustrate legitimate recovery actions by creditors.
Sub-section (4) to Section 96 of the IBC was introduced by amendment, effective from May 26, 2026, stating that the interim moratorium provisions shall not apply where an application is filed for initiating an insolvency resolution process in respect of a personal guarantor to a corporate debtor.
Creditors argued that the amendment should apply retroactively to address the rampant misuse of interim moratorium under Section 96 of the IBC by unscrupulous debtors/guarantors.
Debtors/guarantors argued for prospective application, claiming the interim moratorium was a substantive or 'vested right' that could not be taken away by the amendment.
…Debts Recovery Tribunal-I, Mumbai, restrained…
Indian Bank conducted…