IBC Moratorium Does Not Shield Individuals From Penalties Under Consumer Law: Supreme Court

The Supreme Court ruled that real estate developers cannot evade consumer protection laws by citing insolvency proceedings.

The Court upheld penalties imposed by the National Consumer Disputes Redressal Commission (NCDRC) on appellant for failing to deliver homes on time.

The appellant, Saranga Aggarwal, proprietor of East & West Builders (RNA Corp. Group Co.), argued that insolvency triggered a moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016, stopping legal actions

However, the Court rejected this, stating that protecting irresponsible developers would harm consumer rights.

The court clarified that the Insolvency Code does not protect statutory violation or misconduct, upholding realtor accountability and safeguarding homebuyers' rights.