Supreme Court: promoters directors lose insolvency protection in consumer cases
The Supreme Court just made it clear: if a company is going through insolvency, only the company itself gets protection from legal action, not its promoters or directors.
This comes after homebuyers challenged an earlier order that paused their complaints against the people behind Mantri Technology Constellation Pvt. Ltd.
The court sided with the buyers, saying insolvency rules can't be used as a shield by individuals facing consumer claims.
Consumer complaints can proceed despite insolvency
Thanks to this ruling, consumer complaints against promoters can move forward even if the company is in insolvency.
The judges emphasized that laws like the IBC shouldn't block remedies under other acts, like consumer protection.
So, if you're dealing with issues as a buyer, your rights aren't put on hold just because a company enters insolvency proceedings.