CHAPTER II - CORPORATE INSOLVENCY RESOLUTION PROCESS
Section 14 of the Insolvency and Bankruptcy Code 2016: Moratorium During CIRP
Section 14 creates a statutory moratorium from the insolvency commencement date. Its purpose is to protect the corporate debtor and its assets from specified proceedings, transfers, security enforcement and recovery actions while the corporate insolvency resolution process is conducted, subject to the exceptions and supply protections contained in the section.
Section 14(1): What Does the Moratorium Prohibit?
On the insolvency commencement date, the Adjudicating Authority declares a moratorium prohibiting the categories of action specified in Section 14(1), subject to Sections 14(2), 14(2A) and 14(3).
The moratorium is directed at the corporate debtor and the property and interests covered by the statutory language. Whether a particular proceeding falls within Section 14 depends on its nature, the person against whom it is pursued and the applicable statutory or judicial exception.
Section 14(2): Essential Goods and Services
Section 14(2) protects the supply of essential goods or services to the corporate debtor during the moratorium. Supplies falling within the statutory and regulatory framework cannot be terminated, suspended or interrupted merely because CIRP has commenced.
The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 specifies essential supplies for this purpose. The current regulations should be checked to determine whether a particular supply falls within the protected category.
Section 14(2A): Supplies Critical to Preserve Value and Operate as a Going Concern
Section 14(2A), inserted with effect from 28 December 2019, protects supplies of goods or services that the interim resolution professional or resolution professional considers critical to protect and preserve the value of the corporate debtor and manage its operations as a going concern.
Such supply cannot be terminated, suspended or interrupted during the moratorium except where the corporate debtor has not paid dues arising from that supply during the moratorium period or in such circumstances as may be specified.
Section 14(3): Transactions and Sureties Outside the Moratorium
Section 14(3) provides that the prohibitions in Section 14(1) do not apply to:
| Provision | Exception |
|---|---|
| Section 14(3)(a) | Transactions, agreements or other arrangements that may be notified by the Central Government in consultation with a financial sector regulator or other authority. |
| Section 14(3)(b) | A surety in a contract of guarantee to a corporate debtor, subject to the 2026 Explanation concerning recourse by the surety against the corporate debtor. |
The surety exception means that commencement of CIRP against the corporate debtor does not, by itself, create Section 14 protection for a guarantor or surety against enforcement of the guarantee.
2026 Clarification: Action by a Surety Against the Corporate Debtor
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 inserted an Explanation to Section 14(3)(b), effective 26 May 2026. It clarifies that Section 14(1) also applies where a surety seeks to initiate or continue any action or proceeding against the corporate debtor pursuant to a contract of guarantee.
Section 14(4): How Long Does the Moratorium Continue?
The moratorium takes effect from the date of the moratorium order and ordinarily continues until completion of the corporate insolvency resolution process.
If, during CIRP, the Adjudicating Authority approves a resolution plan under Section 31(1), or passes an order for liquidation under Section 33, the Section 14 moratorium ceases from the date of approval of the resolution plan or the liquidation order, as applicable. A liquidation proceeding is governed by the separate moratorium provisions applicable to liquidation.
Definitions Relevant to Section 14
| Provision | Term | Meaning |
|---|---|---|
| Section 3(8) | Corporate debtor | A corporate person who owes a debt to any person. |
| Section 3(31) | Security interest | A right, title, interest or claim to property created in favour of or provided for a secured creditor by a transaction securing payment or performance of an obligation, subject to the statutory exclusions and the clarification inserted in 2026. |
| Section 5(1) | Adjudicating Authority | For Part II of the Code, the National Company Law Tribunal constituted under the Companies Act, 2013. |
| Section 5(12) | Insolvency commencement date | The date of admission of an application for initiating CIRP by the Adjudicating Authority under the applicable provision. |
| Section 5(15) | Interim resolution professional | An insolvency professional appointed under Section 16. |
| Section 5(27) | Resolution professional | An insolvency professional appointed to conduct CIRP and includes an interim resolution professional. |
For other Part II definitions, see Section 5.
Section 14 in the CIRP Framework
After admission of a CIRP application, Section 13 requires the Adjudicating Authority to declare the Section 14 moratorium, cause a public announcement under Section 15, and appoint an interim resolution professional in accordance with Section 16.
Official Legal Resources
For the current Code and regulations, refer to the India Code portal, IBBI Legal Framework, IBBI Acts, IBBI Notifications, IBBI Regulations and IBBI Orders.