Kerala High Court Sets Aside Rent Control Appellate Authority Order For Proceeding During IBC Moratorium

The Kerala High Court on Tuesday set aside an order of the Rent Control Appellate Authority after finding that an appeal against a corporate debtor had been taken up despite a moratorium being in force under the Insolvency and Bankruptcy Code.

A bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M. observed, “Under Section 14(1), it is clearly stated that once a moratorium is declared, there cannot be an institution of suits or continuation of pending suits or proceedings against the Corporate Debtor. The appeal is a continuation of the original proceedings.”

The court noted that the moratorium was in force on the date when the appeal was taken up for hearing. It observed that the fact that the corporate insolvency resolution process had not been completed by August 23, 2025, did not change the position, since the process continued to be monitored by the National Company Law Tribunal.

Attukal Bhagavathy Temple Trust, the landlord, had initiated eviction proceedings against Attukal Devi Institute of Medical Sciences Ltd. before the Rent Control Court in Thiruvananthapuram.

The trust sought eviction under Section 11(2)(b) of the Kerala Buildings (Lease and Rent Control) Act, alleging that rent had not been paid from August 2013 to August 2015. On February 1, 2026, the rent control court ordered eviction. The tenant institute challenged the order before the Rent Control Appellate Authority.

After insolvency proceedings began against the company, its resolution professional moved the appellate authority, seeking an order to maintain the status quo in the appeal.

The request relied on the moratorium imposed under Section 14 of the Insolvency and Bankruptcy Code, which bars the institution or continuation of proceedings during the corporate insolvency resolution process.

The landlord had also submitted a claim for the entire arrears of rent before the resolution professional in the insolvency proceedings before the National Company Law Tribunal.

The High Court held that the moratorium continued to operate because neither a resolution plan had been approved nor a liquidation order passed. It clarified that the proviso dealing with the end of the moratorium would apply only after the adjudicating authority approves a resolution plan under Section 31 of the Insolvency and Bankruptcy Code or passes an order for liquidation of the corporate debtor under Section 33.

As neither situation had arisen in the present case, the court held that the moratorium remained in force and that the Rent Control Appellate Authority could not have proceeded with the appeal. The impugned order was therefore set aside.

For Petitioner: Advocates A.C. Venugopal, Gautham Mohan, Smt. Vidhya A.C