Facts
Homebuyers booked flats with the corporate debtor but did not receive possession
despite making payments.
They filed a consumer complaint against the developer, promoters/directors, associated
company, and landowners.
During the case, CIRP was initiated against the developer, and a moratorium under
Section 14 of the IBC was imposed.
NCDRC refused to continue the complaint against the remaining respondents, leading
to an appeal before the Supreme Court.
Issue
Whether the Section 14 moratorium prevents consumer proceedings against
respondents other than the corporate debtor.
Arguments
Homebuyers: The moratorium applies only to the corporate debtor, so proceedings
should continue against the other respondents.
Respondents: Since the agreements were with the corporate debtor, the complaint
could not continue separately against others.
Decision
The Supreme Court held that the moratorium under Section 14 applies only to the
corporate debtor. The NCDRC must continue the consumer complaint against the other
respondents, while proceedings against the corporate debtor remain stayed.
Learning
Section 14 IBC protects only the corporate debtor.
Proceedings can continue against promoters, directors, associated companies, or other
parties unless specifically barred by law.
Courts cannot expand the scope of the moratorium beyond the statute.