Section 14 Moratorium vs Interim Moratorium under IBC

A moratorium is the shield that gives every insolvency process breathing space, but the Code uses several different shields. The corporate moratorium under section 14 begins only when a CIRP is admitted; individuals and personal guarantors get an interim moratorium on filing and a fuller moratorium on admission, though personal guarantors lost the interim shield in 2026. This note compares these moratoriums, notes the others found in the Code, and identifies who falls outside their protection.

1. Side by Side

Figure 1: Three moratoriums compared

• Section 14. On admission of the CIRP, the NCLT declares a moratorium prohibiting (a) the institution or continuation of suits and proceedings against the corporate debtor, including execution of decrees and awards; (b) transfer, encumbrance or disposal of its assets by the corporate debtor; (c) any action to foreclose, recover or enforce security interest, including under the SARFAESI Act; and (d) recovery of property by an owner or lessor where it is in the corporate debtor's possession (Topic 22)
• Section 96. On filing of an insolvency resolution application under section 94 or 95, an interim moratorium stays legal actions in respect of any debt until admission or rejection, and covers all partners of a firm (Topic 68)
• Section 101. On admission, a moratorium for 180 days or until approval of the repayment plan stays legal actions in respect of any debt and prevents the debtor from transferring or encumbering assets.

2. Key Differences

• Trigger. Section 14 requires an order of admission; section 96 operates automatically on filing, without any adjudication, which Dilip B Jiwrajka (2023) treated as protective rather than punitive.
• Scope. Section 14 is specific and wide, covering assets, security interests and leased property; sections 96 and 101 speak of legal action or proceeding in respect of any debt, and section 101 adds a bar on the debtor's own dealings.
• Duration. Section 14 lasts until a resolution plan is approved or a liquidation order is passed; section 96 ends on admission, and section 101 lasts at most 180 days.
• Supplies. Under section 14(2) and (2A), essential and critical supplies to the corporate debtor cannot be terminated during the moratorium; Part III contains no equivalent (Topic 23)

3. Who Is Not Protected

Figure 2: Persons inside and outside the section 14 shield

• Guarantors. In SBI v V. Ramakrishnan (2018), the Supreme Court held that the section 14 moratorium does not protect personal guarantors, and the 2019 amendment to section 14(3)(b) confirmed that it does not apply to a surety in a contract of guarantee to a corporate debtor (Topic 66)
• Directors. P. Mohanraj (2021) held that the moratorium bars section 138 proceedings against the corporate debtor but not against its directors (Topic 78)
• Notified transactions. Transactions, agreements or arrangements notified by the Central Government in consultation with a financial sector regulator are excluded.
• Personal guarantors after 2026. Section 96(4) removes the interim moratorium for personal guarantors to corporate debtors, and Tata Capital v Neel Motors (2026) applied this to pending applications; such guarantors are protected only after admission under section 101.

4. Other Moratoriums in the Code

Figure 3: Moratoriums in other processes

• Liquidation. After 2026, the NCLT declares a moratorium for the purposes of section 14(1)(a) and (c), subject to section 52, and suits against the corporate debtor need its leave (Topic 53)
• Pre-pack and CIIRP. In the pre-pack, a moratorium applies from admission for the pre-pack period (section 54E); in the CIIRP, there is no automatic moratorium, only one on the resolution professional's application (section 58G) (Topic 84)
• Fresh start and bankruptcy. An interim moratorium applies on a fresh start application and a moratorium of 180 days on admission (sections 81 and 85); in bankruptcy, an interim moratorium applies on filing (section 124), except for personal guarantors after 2026, and the bankruptcy order itself bars creditors' actions (section 128)

5. Frequently Asked Questions

Does a moratorium begin as soon as a section 7 application is filed against a company?

No. The section 14 moratorium begins only on admission. An automatic moratorium on filing exists only in Part III, under section 96, and no longer for personal guarantors.

Can a bank enforce a promoter's personal guarantee while the company is under the section 14 moratorium?

Yes. Section 14(3)(b) and V. Ramakrishnan (2018) make clear that the corporate moratorium does not protect sureties.

How long does the section 101 moratorium last?

Until 180 days from admission, or the approval of the repayment plan, whichever is earlier.

Can an electricity supplier cut off supply to a company in CIRP for unpaid past dues?

Not during the moratorium. Section 14(2) protects essential supplies, though dues for supplies during the moratorium must be paid as CIRP costs.

6. Related Topics

• Topic 22: Moratorium under Section 14. The corporate moratorium in detail.
• Topic 68: Interim Moratorium and Moratorium. Sections 96 and 101.
• Topic 66: Personal Guarantors. The 2026 change.