The Supreme Court on Monday ruled that promoters and directors of companies undergoing insolvency proceedings cannot use the moratorium under the Insolvency and Bankruptcy Code (IBC) as a shield against consumer complaints filed by homebuyers, Times of India reported, clarifying that the protection applies only to the corporate debtor and not to individuals managing the company.
In a significant relief for homebuyers, the Supreme Court held that insolvency proceedings against a real estate company do not automatically halt legal action against its promoters and directors, setting aside an order of the National Consumer Disputes Redressal Commission (NCDRC) that had stayed proceedings against them.
