--- title: "Moratorium Under Section 14 Operates Against the Corporate Debtor Alone: Supreme Court Reaffirms Its Limited Scope" date: 2026-08-05 author: "Pragalbh Bhardwaj" url: https://ksandk.com/insolvency/section-14-moratorium-corporate-debtor/ --- # Moratorium Under Section 14 Operates Against the Corporate Debtor Alone: Supreme Court Reaffirms Its Limited Scope Posted On - 5 August, 2026 • By - Pragalbh Bhardwaj ![](https://ksandk.com/wp-content/uploads/Moratorium-Under-Section-14-Operates-Against-the-Corporate-Debtor-Alone.webp) ## Introduction The Supreme Court, in *Tejas J. Shah & Amisha T. Shah & Ors. v. Mantri Technology Constellations Pvt. Ltd. (Now Buoyant Technology Constellations Pvt. Ltd.) & Ors. (2026 INSC 746)* (***‘Tejas J. Shah v. Mantri Technologies’***), has held that a moratorium imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016 (***‘Code’***) against a corporate debtor cannot be read to freeze consumer proceedings against its promoters, directors, or associated entities who are not themselves undergoing CIRP. A Bench of Vikram Nath and Sandeep Mehta, JJ. set aside an order of the National Consumer Disputes Redressal Commission (***‘NCDRC’***) that had adjourned an entire consumer complaint *sine die* merely because one of several respondents had been admitted into the [Corporate Insolvency Resolution Process](https://ksandk.com/insolvency/corporate-insolvency-resolution-process/) (***‘CIRP’***). The judgment reaffirms that the shield of Section 14 is statutory in character. It protects the corporate debtor alone and cannot be judicially enlarged to cover parties the Code does not, in terms, protect.  ## Factual Background of the Dispute The appellants are [homebuyers](https://ksandk.com/practice-areas/real-estate-law-firm-in-india/) who booked residential apartments in a project named Mantri Manyata Energia, developed by Respondent No. 1, Mantri Technology Constellations Pvt. Ltd. Respondent No. 2, Mantri Developers Pvt. Ltd., is a company alleged to have been associated with the project. Respondent Nos. 3 to 5 are alleged promoters and directors of Respondent No. 1, and Respondent Nos. 6 and 7 are the landowners of the project land.  Construction agreements were executed between the appellants and Respondent No. 1 in 2016, under which possession was to be handed over by 31.12.2018. Despite substantial payment of the sale consideration and repeated assurances, the project was not delivered within the stipulated time. The appellants, along with other homebuyers, instituted *Consumer Case No. 13 of 2023* before the NCDRC, alleging deficiency in service and unfair trade practices against Respondent Nos. 1 to 7.  During the pendency of the complaint, the National Company Law Tribunal, Bengaluru Bench (***‘NCLT’***), by order dated 23.08.2024, admitted [an application under Section 9 of the Code](https://ksandk.com/insolvency/pre-existing-dispute-section-9-ibc-nclt-inquiry/) and initiated CIRP against Respondent No. 1 alone, triggering a moratorium under Section 14 against Respondent No. 1 alone. The appellants filed I.A. No. 14200 of 2024 before the NCDRC seeking to proceed with the complaint against Respondent Nos. 2 to 7 notwithstanding the moratorium, followed by I.A. No. 15656 of 2024 seeking a rehearing.  By order dated 20.01.2025, the NCDRC rejected both applications. It held that the liability of Respondent Nos. 2 to 7 could not be independently examined at that stage in view of the moratorium operating against Respondent No. 1, and adjourned the complaint* sine die*. This order was assailed before the Supreme Court.  ## Issue Before the Supreme Court The narrow question before the Court was whether the NCDRC was justified in rejecting the appellants’ applications to proceed with the consumer complaint against Respondent Nos. 2 to 7, solely on the ground that a moratorium had been imposed against Respondent No. 1, the corporate debtor.  ## Analysis by the Supreme Court ### (a) The moratorium under Section 14 is confined strictly to the corporate debtor The Court held that the scope of the moratorium is statutory and cannot be enlarged beyond what the statute contemplates. It operates against the corporate debtor alone. No other category, whether a subsidiary company, managers, directors, or personal guarantors, can be brought within its sweep unless the Code expressly provides for it. Relying on *P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258*, the Court noted that even in the context of proceedings under Section 138 of the Negotiable Instruments Act, 1881, Section 14 applies only to the corporate debtor, and natural persons connected to it can still be held liable. The Court also relied on *Ansal Crown Heights Flat Buyers Association v. Ansal Crown Infrabuild Pvt. Ltd. (2024) 5 SCC 745*, where a moratorium against a developer-corporate debtor was held not to protect its promoters and directors, allowing consumer proceedings to continue against them.  ### (b) The objective of the moratorium cannot be judicially expanded to defeat consumer remedies The Court drew on the underlying principle in *Saranga Anilkumar Aggarwal v. Bhavesh Dhirajlal Sheth & Ors., 2025 INSC 314*. Although that case arose in the context of Section 96 of the Code, the Court found its reasoning instructive that the protective sweep of a moratorium must remain within the four corners of the statute and ought not to be expanded in a manner that stultifies [remedies available under the Consumer Protection Act](https://ksandk.com/category/consumer/), unless expressly provided. The object of the Code is to facilitate the resolution process, not to eclipse statutory remedies available under other legislation.  ### (c) The NCDRC’s order pre-judged the very issue it had yet to try The Court found the NCDRC’s approach erroneous and internally inconsistent. The NCDRC had, on the one hand, observed that the question of deficiency in service was a triable issue yet to be determined, while on the other hand concluded that the alleged deficiency was attributable to Respondent No. 1 alone, and that the proceedings could therefore not be split to continue against the remaining respondents. In doing so, the Commission effectively answered a question that was yet to be adjudicated.  ### (d) The NCDRC failed to correctly identify the issue for adjudication The Court clarified that the question before the NCDRC at the interlocutory stage was not whether Respondent Nos. 2 to 7 were liable. It was limited to whether, in the absence of any moratorium operating in their favour, the consumer complaint could proceed against them at all. Since no statutory protection covered Respondent Nos. 2 to 7, the NCDRC was bound to adjudicate the complaint against them, with any question of liability to be decided only upon full consideration of the merits. It was not open to the Commission to foreclose that inquiry at the threshold.  ## Observations of the Supreme Court and the Judgment Applying these principles, the Court held that the impugned order dated 20.01.2025 could not be sustained and set it aside. The civil appeals were partly allowed. The Court restored *I.A. No. 15656 of 2024 *and* I.A. No. 14200 of 2024*, and directed the NCDRC to proceed with *Consumer Case No. 13 of 2023* against Respondent Nos. 2 to 7. It clarified that proceedings against Respondent No. 1 would continue to be governed by the moratorium under Section 14.  The Court declined the appellants’ request to itself allow the consumer complaint and grant the reliefs claimed. The respondents had raised several defences before the NCDRC, including the absence of privity of contract, the maintainability of the complaint, and the absence of any independent obligation under the agreements. Since these objections remained undecided, the Court held it would be inappropriate to adjudicate them for the first time in appeal, and expressly refrained from expressing any opinion on the merits.  ## Conclusion The judgment of the Hon’ble Supreme Court in *Tejas J. Shah v. Mantri Technologies* reaffirms that the statutory bar under Section 14 of the IBC applies strictly to the corporate debtor undergoing CIRP. The shield does not travel with the underlying transaction to cover every party connected to it. The Supreme Court building on *P. Mohanraj *and* Ansal Crown Heights*, and drawing on the broader principle in *Saranga Anilkumar Aggarwal*, held that the protective sweep of a moratorium must not be expanded to cover [affiliated entities](https://ksandk.com/insolvency/joint-insolvency-proceedings-under-ibc/), managers, directors, or personal guarantors who enjoy no independent statutory protection. The object of the moratorium remains the preservation of the corporate debtor’s assets during insolvency resolution, not the eclipse of remedies available to consumers under a separate statute.  For practitioners, the judgment offers a clear takeaway. Homebuyers and other complainants pursuing joint proceedings against a [corporate debtor and its promoters](https://ksandk.com/practice-areas/insolvency-law-firm-in-india/), directors, or associated entities need not wait for the CIRP against the corporate debtor to conclude before pursuing the remaining respondents. A moratorium against one respondent is not, by itself, a ground to freeze an entire complaint, and consumer forums are bound to proceed against parties who fall outside the statutory protection, regardless of how commercially or factually intertwined their liability may appear at the interlocutory stage.  Co authored by: [Vibhor Kathuria](https://ksandk.com/people/vibhor-kathuria/) *Last Updated on 5 August, 2026* Get King Stubb & Kasiva’s legal updates in your Google feed[![Add King Stubb & Kasiva as a preferred source on Google](https://ksandk.com/wp-content/uploads/google_preferred_source_badge_light_en@2x.png)](https://www.google.com/preferences/source?q=https://ksandk.com/) --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)