Section 95 application filed during a subsisting interim moratorium is non-est and void ab initio.

The Appellants are Personal Guarantors for M/s UM Automotive Pvt. Ltd. (Corporate Debtor).

On January 12, 2025, Canara Bank filed applications under Section 95(1) of the Insolvency and Bankruptcy Code (IBC) against both Appellants.

Under Section 96, this filing triggered an interim moratorium effective from the date of application.

While this moratorium was subsisting, Respondent No. 1 (Catalyst Trusteeship Ltd.) filed its own Section 95 applications against the Appellants on August 5, 2025.

Subsequently, on November 10, 2025, Canara Bank withdrew its petitions.

Despite the Appellants' objections that the Respondent's filing was non-est due to the prior moratorium, the Adjudicating Authority (NCLT) admitted the Respondent's applications on February 17, 2026.

1. Whether a Section 95 application filed during the subsistence of an interim moratorium triggered by a prior Section 95 filing is maintainable or non-est in law.

2. Whether the subsequent withdrawal of the prior Section 95 application validates an application that was initiated during the currency of the statutory interim moratorium.

Section 96(1) of the IBC, which mandates that an interim moratorium commences on the date of a Section 94 or 95 application, during which creditors are prohibited from initiating any legal action or proceedings.

The IBC does not contemplate multiplicity of insolvency applications against the same Personal Guarantor, as held in Union Bank of India v. P.K. Balasubramanian.

The principle from the Supreme Court in Alchemist Asset Reconstruction Company Ltd. v. M/s. Hotel Gaudavan Pvt. Ltd., which established that actions initiated in violation of a statutory moratorium are non-est in law.

The Tribunal observed that the interim moratorium under Section 96 is a statutory consequence that triggers automatically upon filing.

Since the Respondent filed its Section 95 applications on August 5, 2025, while Canara Bank’s moratorium was active, the initiation was prohibited by law.

The Tribunal reasoned that a proceeding which is non-est (legally non-existent) from its inception cannot be legalized by the subsequent withdrawal of the prior case.

While the withdrawal on November 10, 2025, ended the moratorium for future actions, it did not possess a retroactive "curing" effect on the Respondent’s mid-moratorium filing.

The Adjudicating Authority erred by failing to consider that the Respondent's application was void ab initio due to the statutory bar.

The NCLAT allowed the appeals and set aside the impugned orders dated February 17, 2026, dismissing applications CP(IB)450/ND/2025 and CP(IB)446/ND/2025.

The Tribunal granted the Financial Creditor liberty to file fresh applications under Section 95, as the original moratorium ceased to exist following the withdrawal of Canara Bank's petitions on November 10, 2025.