Sec 101(1) of IBC Limits Moratorium Period to 180 Days; NCLT/NCLAT Cannot Extend It Further for PIRP

Case Details: Anil Kumar v. Mukund Choudhary - [2025] 171 taxmann.com 490 (NCLAT-New Delhi)

Judiciary and Counsel Details

• Justice Ashok Bhushan, Chairperson, Barun Mitra & Arun Baroka, Technical Member
• Milan Singh Negi, Nikhil Kumar Jha & Ms Aakriti Gupta, Advs. for the Appellant.
• Ms Purti Gupta, Ms Henna George & Ms Harshita Kakkar, Advs. for the Respondent.

Facts of the Case

In the instant case, an application under section 94(1) of the IBC was filed by the personal guarantor, and the NCLT admitted the said application, declaring an Interim Moratorium in terms of section 96 and a Resolution Professional (RP) was appointed.

RP filed an application seeking a 90-day extension of the Personal Insolvency Resolution Process (PIRP) beyond 180 days on the grounds that the repayment plan had been received and was under consideration by creditors.

The NCLT granted an extension of 90 days. However, no views were expressed on the moratorium. RP challenged the NCLT’s order on the ground that the Insolvency Resolution Process without Moratorium would render the entire exercise of personal Resolution Process as futile. Thus, the NCLT had erred in not extending the moratorium beyond 180 days, which was set to expire on 28-10-2024.

It was noted that in view of the expressed provisions of section 101(1) limiting the moratorium period to 180 days on the date when the order is passed by the NCLT for a repayment plan, whichever is earlier, 180 days from the commencement of the moratorium come to an end, and the moratorium also statutorily comes to an end and could not be extended.

NCLAT Held

The NCLAT held that the statutory scheme of section 101 of the IBC is clear and unambiguous, and there is no role of any interpretive process to find out the jurisdiction of the NCLT or NCLAT to extend the period of Moratorium beyond the statutorily prescribed period of 180 days. Thus, no extension of the moratorium could be allowed.

List of Cases Reviewed

• Order of NCLT (New Delhi) in (IB)-202(PB)/2021 in IA/5719/2024, dated 04.12.2024 [2025] 171 taxmann.com 287 (NCLT -New Delhi) (para 25) affirmed.
• Surendra Trading Company’ v. ‘Jugilal Kamlapat Jute Mills Company Ltd. & Ors.’ in (2017) 16 SCC 143
• Committee of Creditors of Essar Steel India Limited’ v. Satish Kumar Gupta & Ors.’ reported in (2020) 8 SCC 531 Vikas Gautamchand Jain’
• P. Mohanraj & Ors.’ (para 24) distinguished.

List of Cases Referred to

• ‘Surendra Trading Company’ v. ‘Jugilal Kamlapat Jute Mills Company Ltd. & Ors.’ in (2017) 16 SCC 143 (para 23).