Section 96 Moratorium Against Personal Guarantors Does Not Stall Section 7 Proceedings Against the Corporate Debtor

The moratorium protecting a personal guarantor under Section 96 of the IBC does not extend to the corporate debtor.

NCLT Mumbai has held that proceedings against the corporate debtor under Section 7 and proceedings against its personal guarantors under Section 95 are distinct and can proceed concurrently. 

The Tribunal also held that subsequent restructuring does not erase an earlier default and that a pre-Section 10A default cannot be protected merely because the loan was later restructured during the Covid period.