Petition U/S 7 Of IBC Can't Be Entertained During Moratorium Period Under Accepted Restructuring Proposal: NCLAT

The National Company Law Appellate Tribunal (NCLAT) ruled that a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) cannot be entertained during the moratorium period under an accepted restructuring proposal. The NCLAT held that once a restructuring plan is agreed upon and a moratorium is in effect, any fresh insolvency petitions against the same corporate debtor are barred. This decision aims to provide stability and allow the restructuring process to proceed without the threat of parallel insolvency proceedings. It underscores the sanctity of the restructuring framework under the IBC and its primacy during the agreed-upon moratorium period, facilitating the revival of financially distressed entities.