Insolvency
The Insolvency and Bankruptcy Code and IBBI regulations.
2stories · Clarified
September 2026
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No interim moratorium for personal guarantors from 26 May 2026, even where the application was already pending: IBBI Circular 106 cites Bombay and Delhi High Courts
No interim moratorium from 26 MayClarifiedIBBI has told insolvency professionals that the interim moratorium under section 96 (and section 124) of the Insolvency and Bankruptcy Code, in respect of a personal guarantor to a corporate debtor, ceased to operate from 26 May 2026 for applications pending before the Adjudicating Authority on that date. The circular rests on judgments of the Bombay High Court (24 July 2026) and the Delhi High Court (19 August 2026).
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IBBI lists six red flags of IBC misuse; insolvency professionals must apply to the Adjudicating Authority where the process serves a fraudulent purpose — Circular 105
Six red flags for IPsClarifiedIBBI says it has information from law enforcement and regulatory agencies that the IBC framework is, in certain cases, being misused for purposes other than insolvency resolution or liquidation. Circular No. IBBI/CIRP/105/2026 dated 9 September 2026 gives insolvency professionals six illustrative indicators to watch for and requires an application to the Adjudicating Authority where, on reasonable grounds, the process appears to serve a fraudulent or malicious purpose.
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