IBC Moratorium only Corporate Debtor – No protection to Directors, Promoters & Landowners

Judgment dated 27.7.2026 of the Supreme Court of India in Civil Appeal Nos.4289-4290 of 2025  Tejas J shah and Amisha T Shah  Vs.   Mantri Technology Constellations

The appellants are home buyers of the respondent no.1 associated with the respondent no.2 Company & respondent nos.3 to 5 promoters / directors of the respondent nos.1 and 2 companies.  Respondent Nos.6 and 7 are the land owners of the land.

As per 2016 agreement, the possession was to be given on 31.12.2018.  However, there was inordinate delay.  The appellants filed consumer case before NCDRC.

During the pendency of consumer complaint, NCLT admitted section 9 IBC application against respondent no.1 on 23.8.2024 for CIRP.  As a result, section 14 IBC moratorium was imposed.

The NCDRC held that the liability of respondent nos. 2 to 7 cannot be independently examined at this stage in view of moratorium against respondent no.1 and therefore, adjourned the consumer complaint sine die.

The question was whether, in the absence of any moratorium operating in their favour, the consumer complaint could proceed against them. In the absence of any such statutory bar, the Commission was required to adjudicate the complaint against the said respondents and determine, upon consideration of the rival pleadings and objections, whether any liability could ultimately be fastened upon them. It was not open to the Commission to foreclose that inquiry at the interlocutory stage. The impugned order cannot be sustained as it declines to undertake the said exercise.

The impugned order proceeds on the premise that since the alleged deficiency in service was attributable only to Respondent No.1, no independent proceedings could continue against the remaining respondents. In doing so, the Commission effectively answered the very question which was yet to be adjudicated. Having itself observed that the liability arising from deficiency in service are yet to be determined, it could not have simultaneously concluded that the alleged deficiency was attributable only to Respondent No. 1 and therefore no complaint could proceed against the rest.