Insolvency and Bankruptcy Code, 2016 | Section 13

Section 13 IBC: Declaration of Moratorium and Public Announcement

Section 13 of the Insolvency and Bankruptcy Code, 2016 sets out the three immediate directions that the National Company Law Tribunal (NCLT) issues after admitting a corporate insolvency resolution process (CIRP) application: declaration of a moratorium, public announcement inviting claims, and appointment of an interim resolution professional.

Key point: Section 13 directs the NCLT to make these orders. Section 14 defines the effect of the moratorium, Section 15 prescribes the public announcement, and Section 16 governs appointment of the interim resolution professional (IRP).

Section 13: Declaration of moratorium and public announcement

Section 13(1). After admission of an application under Section 7 (financial creditor), Section 9 (operational creditor), or Section 10 (corporate applicant), the Adjudicating Authority shall, by order:

Declare a moratorium for the purposes stated in Section 14;
Cause a public announcement of the commencement of CIRP and invite submission of claims under Section 15; and
Appoint an interim resolution professional in accordance with Section 16.

Section 13(2). The public announcement under Section 13(1)(b) must be made immediately after appointment of the interim resolution professional.

These obligations follow admission of the application; merely filing an insolvency application does not itself activate the Section 14 moratorium.

What is a moratorium under Section 14?

A moratorium is a statutory temporary restraint imposed by the NCLT during CIRP to preserve the corporate debtor's assets and provide an orderly opportunity for resolution. Subject to statutory exceptions, Section 14(1) prohibits:

Institution or continuation of suits or proceedings against the corporate debtor, including execution of judgments, decrees or orders;
Transfer, encumbrance, alienation or disposal of the corporate debtor's assets or legal or beneficial interests;
Action to foreclose, recover or enforce security interests created by the corporate debtor, including under the SARFAESI Act; and
Recovery of property by an owner or lessor where that property is occupied by or in possession of the corporate debtor.

Section 14 also contains protections concerning essential goods and services and critical supplies, subject to applicable conditions. Statutory exclusions include specified notified transactions and sureties in contracts of guarantee to the corporate debtor. The moratorium generally continues until CIRP concludes, but ceases upon approval of a resolution plan under Section 31 or an order for liquidation under Section 33, as provided by Section 14(4).

Public announcement under Section 15 and Regulation 6

The announcement informs creditors and other stakeholders that CIRP has commenced and invites claims for verification. Section 15 requires particulars such as the corporate debtor's identity, registration authority, claim submission deadline, IRP details, consequences of false or misleading claims, and the relevant CIRP closing date.

Under Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the IRP makes the public announcement immediately on appointment, meaning not later than three days. It is made in prescribed Form A and published through the prescribed newspaper and website channels. The initial deadline stated for proof of claims is ordinarily 14 days from the IRP's appointment, subject to the regulations governing later claims.

Appointment and role of the interim resolution professional

Section 16 governs the IRP's appointment. Following appointment, the IRP undertakes functions under Sections 17 and 18, including taking over management powers as provided by law, collecting information on assets and liabilities, receiving and collating creditor claims, and facilitating constitution of the committee of creditors. Appointment under Section 13(1)(c) is therefore a central step in the CIRP framework.

Practical implications for creditors and companies

For financial and operational creditors

Monitor the public announcement, obtain the applicable claim form, submit supporting records within the prescribed period, and follow instructions issued by the IRP. The moratorium may restrict individual recovery proceedings against the corporate debtor, but it does not eliminate the underlying claim merely because CIRP begins.

For the corporate debtor

After admission, management must cooperate with the IRP and preserve records and assets. Transactions and proceedings must be assessed against the moratorium and the IRP's statutory authority.

For litigants and contractual counterparties

Whether a proceeding, guarantee, contract or recovery action is affected depends on the text of Section 14, applicable exceptions and binding judicial interpretation. A moratorium against the corporate debtor is not automatically a universal stay against every third party.

Official legislation and regulatory references

For an overview of the legislation, see The Insolvency and Bankruptcy Code, 2016.

Updated: 21 October 2026. This article is for general legal information. Refer to the current statutory text, notifications and case law for specific proceedings.