Imposition Of Pre CIRP Moratorium: Icing On The Cake

The National Company Law Appellate Tribunal while adjudicating the matter of NUIPulp and Paper Industries Private Limited v. Ms Roxcel Trading GMBH, upheld the viewpoint of National Company Law Appellate Tribunal, wherein, moratorium was imposed on the Corporate Debtor as per section 14 of the Insolvency and Bankruptcy Code, 2016 before the commencement of corporate insolvency resolution process. Therefore, an application was moved by the applicant under section 60 of the IBC, requesting the NCLT to pass an interim order as per Rule 11 of the NCLT Rules, 2016, restricting the Corporate Debtor from alienating, encumbering or creating any third party interest on the assets of the Corporate Debtor till the time insolvency petition was not adjudicated upon by NCLT. While remitting the matter to AA, the NCLAT observed that the Adjudicating Authority has exceeded its jurisdiction and exercised its inherent powers under Rule 11 of the National Company Law Tribunal Rules, 2016, which is actually not applicable in the cases under Sections 7 or 9 or 10 of the I&B Code. It was held that a party can approach Adjudicating Authority that can allow or disallow application as per inherent powers under Rule 11 of NCLT Rules, 2016.