Section 96. Interim- moratorium. –

(1) When an application is filed under section 94 or section 95 –

• (a) an interim-moratorium shall commence on the date of the application in relation to all the debts and shall cease to have effect on the date of admission of such application; and
• (b) during the interim-moratorium period –
  • (i) any pending legal action or proceeding in respect of any debt shall be deemed to have been stayed; and
  • (ii) the creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt.

(2) Where the application has been made in relation to a firm, the interim-moratorium under sub-section (1) shall operate against all the partners of the firm as on the date of the application.

(3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.