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2026 INSC 746 • Supreme Court of India

Tejas Shah v. Mantri Technology Constellations

“IBC Moratorium Shields Only the Corporate Debtor: Homebuyers' Consumer Complaint Can Proceed Against Promoters, Directors and Landowners”

27 July 2026Justice Vikram Nath, Justice Sandeep Mehta
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TL;DR

Homebuyers of the "Mantri Manyata Energia" project had filed Consumer Case No. 13 of 2023 before the NCDRC against the developer (Respondent No. 1) and six others, alleging deficiency in service and unfair trade practices for failure to deliver apartments by 31.12.2018. After the NCLT, Bengaluru admitted a Section 9 IBC application against Respondent No. 1 on 23.08.2024 and a Section 14 moratorium came into force, the NCDRC on 20.01.2025 refused to continue the complaint against Respondent Nos. 2 to 7 and adjourned it sine die. The Supreme Court set this aside. It held that the Section 14 moratorium is statutory, operates against the corporate debtor alone and cannot be extended to other companies, promoters, directors or landowners, relying on P. Mohanraj, Ansal Crown Heights and Saranga Anilkumar Aggarwal. The NCDRC was directed to hear the complaint against Respondent Nos. 2 to 7 in accordance with law, while proceedings against Respondent No. 1 remain under the moratorium. The Court did not decide the merits or the respondents' objections, such as lack of privity of contract.

The Bottom Line

When a developer goes into insolvency, the moratorium under Section 14 of the IBC protects only that corporate debtor. Homebuyers can continue their consumer complaint against the other respondents, such as associated companies, promoters, directors and landowners. The consumer commission must decide whether those respondents are actually liable instead of adjourning the entire complaint because of the moratorium.

Consumer LawCorporate LawProperty Rights

Case Timeline

The journey from FIR to Supreme Court verdict

event
31 Dec 2018

Stipulated Possession Date Passes

Possession of the apartments was due on or before this date but was not delivered.

order
23 Aug 2024

NCLT Admits Section 9 IBC Application

The NCLT, Bengaluru Bench admitted the application against Respondent No. 1 and initiated CIRP, bringing a Section 14 moratorium into effect against it.

order
20 Jan 2025

NCDRC Rejects Applications and Adjourns Sine Die

The NCDRC rejected I.A. Nos. 14200 and 15656 of 2024 and adjourned the complaint sine die in view of the moratorium.

judgment
27 Jul 2026

Supreme Court Delivers Judgment

The Supreme Court partly allowed the appeals, set aside the NCDRC's rejection and directed it to hear the complaint against Respondent Nos. 2 to 7.

The Story

The appellants are homebuyers who booked residential apartments in the project "Mantri Manyata Energia", developed by Respondent No. 1, Mantri Technology Constellations Pvt. Ltd. (now Buoyant Technology Constellations Pvt. Ltd.). Respondent No. 2, Mantri Developers Pvt. Ltd., is alleged to have been associated with the development. Respondent Nos. 3 to 5 are alleged to be promoters or directors of Respondent Nos. 1 and 2, and Respondent Nos. 6 and 7 are the landowners of the project land. Construction agreements and agreements for sale of undivided share in the land were executed between the appellants and Respondent No. 1 in 2016, with possession due on or before 31.12.2018.

According to the appellants, despite substantial payment of the sale consideration and repeated assurances, possession was not delivered in time. They, along with other homebuyers, instituted Consumer Case No. 13 of 2023 before the National Consumer Disputes Redressal Commission (NCDRC) alleging deficiency in service and unfair trade practices against Respondent Nos. 1 to 7.

During the pendency of the complaint, the NCLT, Bengaluru Bench, by order dated 23.08.2024, admitted an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against Respondent No. 1 and initiated the Corporate Insolvency Resolution Process, imposing a moratorium under Section 14. The appellants filed I.A. No. 14200 of 2024 asking that the complaint be proceeded with against Respondent Nos. 2 to 7 notwithstanding the moratorium, followed by I.A. No. 15656 of 2024 seeking rehearing.

By order dated 20.01.2025, the NCDRC rejected both applications, holding that the liability of Respondent Nos. 2 to 7 could not be independently examined in view of the moratorium, since the agreements were entered into only with Respondent No. 1 and proceedings could not be split up. It adjourned the complaint sine die. The appellants appealed to the Supreme Court. Counsel appeared for Respondent No. 1, Respondent No. 2, Respondent Nos. 3 to 5, and Respondent Nos. 6 and 7.

Legal Issues

Click each question to reveal the Supreme Court's answer

1Question

Whether the NCDRC was justified in rejecting the applications to continue the consumer complaint against Respondent Nos. 2 to 7 on account of the moratorium operating against Respondent No. 1, the corporate debtor?

Tap to reveal answer
1SC Answer

No. The Supreme Court held that the Section 14 moratorium is statutory and operates against the corporate debtor alone. Respondent No. 1 alone is the corporate debtor, and no independent moratorium or protection operates in favour of Respondent Nos. 2 to 7. In the absence of any legal bar, the NCDRC was not justified in refusing to proceed against them.

Confirms that the IBC moratorium cannot be extended by adjudicating bodies to promoters, directors, group companies or landowners, so homebuyers keep their consumer remedies against them.

2Question

Whether the NCDRC could decline to continue the complaint against the other respondents on the ground that the alleged deficiency pertained only to Respondent No. 1?

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2SC Answer

No. The Court held that, having itself observed that liability was yet to be determined, the Commission could not simultaneously conclude that deficiency was attributable only to Respondent No. 1, thereby answering the very question yet to be adjudicated. The question at the interlocutory stage was whether the complaint could proceed in the absence of a moratorium, not whether Respondent Nos. 2 to 7 were liable.

Prevents a consumer forum from prejudging liability at the stage of deciding whether the complaint may proceed.

3Question

Whether the Supreme Court should itself allow the consumer complaint and grant the reliefs claimed?

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3SC Answer

No. The respondents had raised several objections, including absence of privity of contract, maintainability of the complaint and absence of any independent obligation under the agreements, which were yet to be decided by the NCDRC. The Court refrained from expressing any opinion on the merits.

The respondents' liability remains open for decision by the NCDRC on the pleadings and evidence.

Arguments

The battle of arguments before the Supreme Court

Petitioner

Vihaan Kumar

1

Moratorium against Respondent No. 1 does not bar the complaint against the others

The appellant homebuyers argued before the NCDRC and the Supreme Court that the moratorium under Section 14 of the IBC operated only against Respondent No. 1, the corporate debtor, and that the complaint should be heard against Respondent Nos. 2 to 7, who are alleged to be associated with the project, its promoters or directors, and the landowners.

Section 14, IBC, 2016
2

Supreme Court should itself allow the complaint

The appellants' counsel urged the Supreme Court to proceed to allow the consumer complaint and grant the reliefs claimed in it. The Court declined to do so.

Respondent

State of Haryana

1

Objections on privity, maintainability and independent obligation

The respondents raised several objections, including absence of privity of contract, maintainability of the complaint, and the absence of any independent obligation under the agreements. The Supreme Court recorded these but left them for decision by the NCDRC. Counsel appeared for Respondent No. 1 (Mr. Ashutosh Dubey), Respondent No. 2 (Mr. D. Seshadri Naidu, Senior Counsel), Respondent Nos. 3 to 5 (Mr. Shekhar G Devasa, Senior Counsel) and Respondent Nos. 6 and 7 (Mr. Sajan Povayya, Senior Counsel).

2

Proceedings cannot be split as the agreements were only with Respondent No. 1

The reasoning of the NCDRC, which the respondents sought to uphold, was that all the construction and sale agreements were entered into with Respondent No. 1, so the deficiency pertained only to it and the proceedings could not be split up to continue against the remaining respondents.

Court's Analysis

How the Court reasoned its decision

The Court framed the issue narrowly: whether the NCDRC was justified in rejecting the applications because of the moratorium against Respondent No. 1. It explained that under Section 14 IBC, once insolvency begins and a moratorium is declared, pending suits and proceedings against the corporate debtor halt automatically, to preserve its assets and facilitate orderly resolution. The scope of the moratorium is statutory and neither the adjudicating authority nor a court may enlarge it: it operates against the corporate debtor alone, and no subsidiary, manager, director or personal guarantor can be added unless specifically provided. The Court relied on P. Mohanraj v. Shah Brothers Ispat (Section 14 applies only to the corporate debtor and natural persons can be held liable), Ansal Crown Heights Flat Buyers Association v. Ansal Crown Infrabuild (moratorium against the corporate debtor does not protect promoters and directors, and consumer proceedings can continue against them), and Saranga Anilkumar Aggarwal v. Bhavesh Dhirajlal Sheth (the protective sweep of the moratorium must remain within the four walls of the statute and must not stultify remedies under the Consumer Protection Act). Applying these, the Court found the NCDRC's approach erroneous. The Commission had said liability was yet to be determined while also saying deficiency lay only with Respondent No. 1, effectively answering the question yet to be adjudicated. The proper question was whether, with no moratorium in their favour, the complaint could proceed against Respondent Nos. 2 to 7. The Court refused to decide the merits itself because the privity, maintainability and independent-obligation objections were pending before the NCDRC.

the moratorium operates against the corporate debtor alone.

Para 6

States the rule that the Section 14 moratorium protects only the corporate debtor.

The object of the Code is to facilitate the resolution process and not to eclipse the statutory remedies.

Para 8

Ties the narrow reading of the moratorium to the preservation of remedies under the Consumer Protection Act.

No independent moratorium or independent protection operates in favour of Respondent Nos. 2 to 7.

Para 11

Applies the principle to the facts and shows why the NCDRC erred.

It was not open to the Commission to foreclose that inquiry at the interlocutory stage.

Para 13

The Commission must examine the liability of the other respondents on the pleadings rather than prejudge it.

Partly Allowed

The Verdict

Relief Granted

The homebuyers' complaint revives against Respondent Nos. 2 to 7 before the NCDRC. They did not obtain a decision on liability or the reliefs claimed in the complaint, which remain to be adjudicated.

Directions Issued

  • The NCDRC shall proceed to hear Consumer Complaint No. 13 of 2023
  • Proceedings against Respondent No. 1 shall continue to remain governed by the moratorium under Section 14 of the IBC
  • The NCDRC shall dispose of the complaint, insofar as Respondent Nos. 2 to 7 are concerned, in accordance with law
  • The Supreme Court expressed no opinion on the merits of the rival contentions, including privity of contract and maintainability

Key Legal Principles Established

1

The moratorium under Section 14 of the IBC is statutory and operates against the corporate debtor alone.

2

Neither an adjudicating authority nor a court can enlarge the moratorium to cover subsidiaries, managers, directors, personal guarantors or other persons unless the statute specifically provides.

3

Promoters, directors and landowners do not get the benefit of the corporate debtor's moratorium.

4

The protective sweep of the moratorium must not be expanded to stultify remedies under the Consumer Protection Act.

5

The object of the IBC is to facilitate resolution, not to eclipse statutory remedies.

6

When deciding whether a complaint can proceed against other respondents, a forum must not decide their liability in advance.

7

Objections such as absence of privity of contract are to be decided by the consumer forum on the pleadings and evidence.

Key Takeaways

What different people should know from this case

  • If the builder of your flat goes into insolvency, your consumer case against the builder company stops, but it can continue against others named in it, such as promoters, directors and landowners.
  • The insolvency moratorium protects the company in insolvency and not the people behind it.
  • The Supreme Court did not decide that those other persons are liable; that is for the NCDRC to decide after hearing both sides.
  • You may still need to file your claim in the insolvency process for the company in insolvency.
  • Consumer forums cannot simply shelve an entire homebuyers' complaint because one respondent is under moratorium.

Watch & Learn

Video explanations in multiple languages

Kannada

Tejas Shah v. Mantri Technology Constellations - Kannada Explanation

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Tejas Shah v. Mantri Technology Constellations - Tamil Explanation

Telugu

Tejas Shah v. Mantri Technology Constellations - Telugu Explanation

Hindi

Tejas Shah v. Mantri Technology Constellations - Hindi Explanation

English

Tejas Shah v. Mantri Technology Constellations - English Explanation

Frequently Asked Questions

The Supreme Court held that the IBC Section 14 moratorium against the developer, Respondent No. 1, does not prevent the homebuyers' consumer complaint from continuing against Respondent Nos. 2 to 7. It set aside the NCDRC's order that had adjourned the complaint sine die and directed the NCDRC to hear the complaint against those respondents in accordance with law.
No. The Court held that the moratorium operates against the corporate debtor alone and no other category, such as subsidiary companies, managers, directors or personal guarantors, can be added to it unless the statute specifically provides.
No. The Court expressly refrained from expressing any opinion on the merits. The respondents have raised objections such as absence of privity of contract, maintainability and the absence of any independent obligation under the agreements, all of which remain for the NCDRC to decide.
The proceedings against Respondent No. 1, the corporate debtor, continue to remain governed by the moratorium under Section 14 of the IBC.
The NCDRC had observed that liability was yet to be determined, yet concluded that the deficiency was only that of Respondent No. 1 and the proceedings could not be split. The Supreme Court held that this effectively answered the very question yet to be adjudicated, and that in the absence of any moratorium in their favour the complaint had to proceed against Respondent Nos. 2 to 7.

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