By S&S Co. Advocates & Solicitors · Published 5 August 2026 · Informational content, not legal advice — see our disclaimer
The Moratorium Attaches to the Corporate Debtor's Assets — Not to Every Property It Once Touched
Section 14(1) of the Insolvency and Bankruptcy Code, 2016 requires the adjudicating authority, on commencement of the Corporate Insolvency Resolution Process (CIRP), to declare a moratorium prohibiting — among other things — the transfer, encumbrance, alienation, or disposal of 'the assets of the corporate debtor'. The operative phrase is 'assets of the corporate debtor', and it does the real work in this provision: the moratorium restrains dealings with property that still belongs to the corporate debtor at the point the moratorium is declared, not property the corporate debtor once owned and has since irrevocably transferred to someone else through a completed, lawful transaction.
Section 18 of the IBC directs the Interim Resolution Professional to take custody and control of the corporate debtor's assets, and Section 3(27) defines 'property' broadly. But breadth of definition does not expand the moratorium beyond what actually still sits within the corporate debtor's estate. Where a company has, well before the CIRP commenced, executed and registered a conveyance transferring absolute title to a buyer — with consideration paid, stamp duty and registration fees discharged, and possession handed over — that property has left the corporate debtor's estate as a matter of property law, and the moratorium simply has nothing left to attach to.
What the Supreme Court Has Said About Completed Transactions
This principle — that Section 14 protects the corporate debtor's estate rather than creating a new restraint over property that has already left it — finds support in the Supreme Court's recent approach in Sincere Securities Pvt. Ltd. v. Chandrakant Khemka, 2025 INSC 931. While that case concerned a different specific sub-clause of Section 14(1) (dealing with recovery of property by an owner or lessor), the Court's broader reasoning reinforces that the moratorium functions as a shield preserving the status quo of the corporate debtor's actual estate during resolution, not as a sword that can be wielded to unwind or reach into transactions and property interests that already sit outside that estate.
This is consistent with a wider and consistent line of NCLT and NCLAT authority holding that where a developer or corporate debtor has executed and registered a conveyance transferring title to a buyer prior to the commencement of CIRP, that property does not form part of the insolvency estate — and a Resolution Professional or creditor seeking to bring such property within the CIRP acts outside the moratorium's actual scope. The consistent theme across this body of authority is that the moratorium's purpose is to preserve, not to expand, the corporate debtor's estate as it stood on the date of commencement.
Tribunal Orders Carving Out Specific Projects Add a Further Layer
In large, multi-project corporate insolvencies — particularly in the real estate sector, where a single developer may have dozens of projects across multiple states in various stages of completion — the NCLAT has, in appropriate cases, confined the scope of a CIRP to specific named projects, expressly excluding others from the insolvency process altogether and permitting them to continue 'in accordance with their respective contractual terms, independent of the CIRP'. Where such an order is made and is not disturbed on further appeal, it operates as an independent and additional basis, beyond the general Section 14 analysis, for treating a specific project's assets and transactions as entirely outside the CIRP.
For a buyer or property owner whose specific project or transaction is expressly excluded by such an order, the position is doubly secure: first, on the general principle that completed, pre-CIRP transfers fall outside the moratorium's scope in the first place, and second, on the specific tribunal order confirming that the project itself is not part of the ongoing insolvency proceeding at all. Any subsequent attempt by a resolution professional or creditor to assert a claim over such property would need to grapple with both layers of protection, not merely one.
A Completed, Independently-Governed Development Is a Further Indicator
Beyond the legal transfer analysis, tribunals and courts also look at practical, factual indicators of whether a project remains a live part of the corporate debtor's ongoing business. A residential township or commercial development that is fully built out, with individual units conveyed and possession handed over, and governed day-to-day by an independent Residents' Welfare Association or equivalent body rather than by the developer, is factually distinguishable from an under-construction project where the developer retains an ongoing obligation to deliver units, infrastructure, or amenities. The former has no going-concern character left for a resolution professional to manage or resolve; the latter does.
None of this means every buyer or property owner connected to an insolvent developer can simply assume their specific asset is protected — the analysis genuinely depends on the specific facts: whether title was actually and completely transferred before CIRP commencement, whether any encumbrance was created in favour of the corporate debtor's creditors, and whether any tribunal order has addressed the specific project. Given how much turns on these specific, document-driven facts, anyone in this position — whether a resolution professional assessing what falls within an estate, or a buyer seeking to confirm their property is unaffected — is well served getting a considered opinion on the specific chain of title and CIRP orders involved, rather than relying on the general principle alone.
Frequently Asked Questions
Does the IBC moratorium freeze all property connected in any way to an insolvent company?
No — Section 14 restrains dealings only with property that remains part of the corporate debtor's actual estate at the time the moratorium is declared; property already conveyed and transferred to a third party through a completed, lawful pre-CIRP transaction generally falls outside its scope.
If a Resolution Professional lists a property as an asset, does that make it part of the CIRP?
Not conclusively — inclusion in a resolution professional's initial assessment is not itself determinative; the question is ultimately a legal one about whether title had genuinely and completely passed out of the corporate debtor before CIRP commencement, which a claimant may need to establish before the adjudicating authority if disputed.
Can an NCLAT order excluding certain projects from a CIRP be relied upon indefinitely?
Generally yes, once it has attained finality (including surviving any further appeal), though parties should always confirm the current status of any such order, since insolvency proceedings can evolve and orders can be modified on subsequent applications.
References & Further Reading
This article references the following statutes, rules and judicial decisions. Case citations link to the fuller discussion in our Legal Updates archive, verified against primary sources at the time of writing.
- Insolvency and Bankruptcy Code, 2016, Sections 3(27), 14, and 18 — definition of property, the moratorium, and the Interim Resolution Professional's custody of assets.
- Sincere Securities Pvt. Ltd. v. Chandrakant Khemka, 2025 INSC 931 (Supreme Court of India, 5 August 2025) — on Section 14(1)'s function as a shield preserving the corporate debtor's actual estate, not a sword to reach property outside it.
- Pioneer Urban Land and Infrastructure Ltd. v. Union of India, (2019) 8 SCC 416 — Supreme Court on the interaction between real estate transactions and the IBC framework more generally.
- See our IBC & Insolvency Notable Judgments and Real Estate & RERA practice page for related guidance.