Section 14(1) of the IBC restrains the Central Government, State Government, local authority and sectoral regulators from terminating a permit, registration, quota, concession, clearance on the grounds of insolvency of a corporate debtor. As per courts does the restraint also extend to termination on ‘non-insolvency grounds’.
If a contract is terminated in exercise of contractual rights, due to persistent non-performance or delays unrelated to insolvency then the restraint under Section 14 of the IBC is non-applicable. The restraint under Section 14 only applies if a contract or permit is being terminated on grounds of insolvency. See, for example, Pradeep Upadhyay v Bhadohi Industrial Development Authority, NCLAT, New Delhi, Company Appeal (AT) (Insolvency) No. 1152 of 2025.