Bar under Sec 14 IBC extends to any action of enforcement of any security interest created by corporate debtor under SARFAESI Act 2002

Last updated: 14 June 2022
Quick Summary
The Supreme Court has ruled that the moratorium under Section 14 of the Insolvency and Bankruptcy Code (IBC) 2016 prohibits any action to enforce security interests created by a corporate debtor. This includes actions taken under the SARFAESI Act 2002. The Court emphasised that the IBC, particularly Section 238, overrides other laws when there is an inconsistency, ensuring that once Corporate Insolvency Resolution Process (CIRP) begins, all such enforcement actions are halted.

Court :
Supreme Court of India

Brief :
Once CIRP initiated any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to foreclose, recover or enforce any security interest created by Corporate Debtor will be prohibited.

Citation :
Civil Appeal No. 4750 of 2021

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