IBC: Terminated Contract Not Corporate Debtor’s Asset; Moratorium Won’t Revive Extinguished Contractual Rights — Supreme Court

The Insolvency and Bankruptcy Code (IBC) moratorium under Section 14 protects property and assets of a corporate debtor — but the Supreme Court of India has held that a validly terminated contract, which ceased to exist before insolvency proceedings began, cannot be treated as an “asset” or “property.” (Live Law) The Court clarified that once a contract stands lawfully terminated, no revived contractual rights or protections under moratorium flow in its favour. What remains, if at all, is only a claim for damages (an unsecured monetary claim), not a proprietary right. This ruling prevents insolvent developers or corporate debtors from using moratorium as a shield to block redevelopment or contractual termination consequences — maintaining sanctity of lawful termination and ensuring creditors or counterparties are not unduly restrained by insolvency protections. (Live Law)