TEJAS J. SHAH & AMISHA T. SHAH V. MANTRI TECHNOLOGY CONSTELLATIONS PVT. LTD. & ORS 2026 INSC 746:

DATE: 27.06.2026

COURT: Supreme Court of India

BENCH: Justice Vikram Nath and Justice Sandeep Mehta

FACTS:

The appellants, who were homebuyers, had booked residential apartments in the 'Mantri Manyata Energia' project developed by Respondent No. 1, Mantri Technology Constellations Private Limited (now Buoyant Technology Constellations Private Limited), pursuant to agreements executed in 2016. Under the agreements, possession of the apartments was to be delivered by 31 December 2018. Despite making substantial payments towards the sale consideration, the homebuyers did not receive possession within the stipulated timeline. Alleging deficiency in service and unfair trade practices, they, along with other purchasers, instituted Consumer Complaint No. 13 of 2023 before the National Consumer Disputes Redressal Commission (NCDRC) against the developer, its associated company, promoters/directors, and the landowners.

During the pendency of the consumer complaint, the National Company Law Tribunal (NCLT), Bengaluru Bench, admitted insolvency proceedings against Respondent No. 1 under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC), resulting in the imposition of a moratorium under Section 14 of the IBC. The appellants consequently sought continuation of the consumer complaint against Respondent Nos. 2 to 7, contending that the moratorium applied only to the corporate debtor. However, the NCDRC rejected their applications, holding that the complaint could not proceed independently against the remaining respondents while the moratorium was in force against Respondent No. 1, and adjourned the matter sine die. Aggrieved by this decision, the appellants approached the Supreme Court.

ISSUES:

The principal issue before the Supreme Court was whether the moratorium imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016, against the corporate debtor (Respondent No. 1) barred the continuation of consumer proceedings before the NCDRC against the remaining respondents, namely the associated company, its promoters/directors, and the landowners, who were not themselves subject to insolvency proceedings or any statutory moratorium

JUDGEMENT WITH REASONING:

The Supreme Court partly allowed the appeals and set aside the NCDRC's order rejecting the appellants' interlocutory applications. It held that the consumer complaint could validly proceed against Respondent Nos. 2 to 7, as the statutory moratorium under Section 14 of the IBC operated only in favour of the corporate debtor, Respondent No. 1. The Court directed the NCDRC to continue adjudicating the complaint against the remaining respondents in accordance with law, while clarifying that proceedings against Respondent No. 1 would remain suspended during the subsistence of the moratorium.

The Supreme Court held that the scope of the moratorium under Section 14 of the IBC is expressly confined to the corporate debtor and cannot be expanded by judicial interpretation to protect entities not covered by the statute. Referring to its earlier decisions in P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd., Ansal Crown Heights Flat Buyers Association v. Ansal Crown Infrabuild Pvt. Ltd., and Saranga Anilkumar Aggarwal v. Bhavesh Dhirajlal Sheth, the Court reiterated that promoters, directors, associated companies, guarantors, and other persons do not automatically receive the benefit of the moratorium unless the statute expressly provides otherwise. The legislative object of the moratorium is to preserve the assets of the corporate debtor during the corporate insolvency resolution process, not to extinguish or indefinitely suspend statutory remedies available against other parties who may independently incur liability.

The Court further found that the NCDRC had committed a legal error by effectively deciding, at the interlocutory stage, that the alleged deficiency in service was attributable only to the corporate debtor, even after acknowledging that liability had not yet been adjudicated. According to the Supreme Court, the question before the NCDRC was not whether Respondent Nos. 2 to 7 were ultimately liable, but merely whether any statutory bar prevented the complaint from proceeding against them. Since no moratorium or other legal protection operated in their favour, the Commission was duty-bound to adjudicate the consumer complaint against those respondents on its merits. Questions concerning the absence of privity of contract, maintainability of the complaint, or the existence of independent obligations were matters requiring determination during the substantive hearing and could not be conclusively decided while disposing of the interlocutory applications. Consequently, the Supreme Court restored the proceedings before the NCDRC against Respondent Nos. 2 to 7 while leaving all questions on their ultimate liability open for adjudication.

ANALYSIS:

The judgment reinforces the principle that the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 is a limited statutory protection intended solely for the corporate debtor undergoing insolvency proceedings. By refusing to extend the moratorium to promoters, directors, associated entities, or landowners in the absence of an express legislative mandate, the Supreme Court reaffirmed the narrow construction of insolvency protections and ensured that the IBC is not used as a shield by non-insolvent parties. The decision is significant for homebuyers and consumers as it prevents insolvency proceedings against a developer from paralysing all parallel remedies against other entities that may bear independent legal responsibility. In doing so, the Court harmonised the objectives of the IBC with the Consumer Protection Act by preserving consumer remedies without undermining the insolvency resolution process. The ruling also strengthens the jurisprudence developed in P. Mohanraj, Ansal Crown Heights, and Saranga Anilkumar Aggarwal, reiterating that statutory moratoria must remain confined to the scope expressly contemplated by Parliament.

The Court also underscored the importance of procedural fairness by holding that adjudicatory forums cannot prejudge issues of liability at an interlocutory stage. The NCDRC had effectively concluded that only the corporate debtor could be liable for the alleged deficiency in service despite simultaneously observing that liability was yet to be determined. The Supreme Court found this approach legally unsustainable, emphasising that the Commission's immediate task was merely to ascertain whether any statutory bar prevented the continuation of proceedings against the remaining respondents, not to decide the merits of the dispute. By restoring the consumer complaint against Respondent Nos. 2 to 7 while leaving all substantive questions of liability, maintainability, and contractual obligations open for adjudication, the Court reaffirmed the distinction between procedural and substantive determinations. The decision therefore serves as an important precedent against the premature dismissal of claims and ensures that consumer forums continue to examine the independent liability of promoters, directors, and associated entities wherever legally sustainable, notwithstanding the pendency of insolvency proceedings against the corporate debtor.