Supreme Court: Insolvency shield is for firm, not promoters

Supreme Court ruled that moratorium under Section 14 of the Insolvency and Bankruptcy Code protects only the corporate debtor, not promoters or directors.

A bench of Justices Vikram Nath and Sandeep Mehta quashed a National Consumer Disputes Redressal Commission order that stayed consumer complaints against promoters of Mantri Technology Constellation Pvt Ltd due to company's insolvency.

The Court held that the moratorium's object is to preserve assets for resolution and cannot be expanded to shield promoters from proceedings under the Consumer Protection Act.

Homebuyers challenged the NCDRC order, arguing promoters cannot claim protection; the Supreme Court revived proceedings against the promoters and directors.