SIB Bank filed an application before NCLT on 3rd Feb 2020 for initiating corporate insolvency resolution process against Gamma Ltd. NCLT accepted the application on 14th February 2020 and appointed the Interim resolution

According to Section 14 of the Insolvency and Bankruptcy Code, 2016 on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely: - The institution of suits or continuation of any pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority. Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein. Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the SARFAESI Act, 2002. The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. Further, "Insolvency commencement date" means the date of admission of an application for initiating corporate insolvency resolution process by the Adjudicating Authority under section 7, 9 or section 10, as the case may be. [Section 5(12) of the Code] On the basis of the above provisions the moratorium period will start from the date of acceptance of the application i.e. 14th February 2020 and hence the action taken by the company is invalid. The sale of property by the corporate debtor during the moratorium period (14th February 2020 to 21st February 2020) is prohibited as it falls under 'transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets'. Therefore, the corporate debtor's claim that its action was in conformity with the law is incorrect, and the sale is invalid.