In the landmark case of Saranga Anilkumar Aggarwal v Bhavesh Dhirajlal Sheth and Ors, the Supreme Court held that insolvency proceedings under section 96 of the Insolvency and Bankruptcy Code, 2016 (IBC), cannot stay penalty actions under the Consumer Protection Act, 1986 (CPA). An interim-moratorium in force under section 96 of the IBC does not prevent the enforcement of penalties under section 27 of the CPA.
Many homebuyers levelled complaints against the real estate developer appellant about delayed possession and unsatisfactory services. The National Consumer Disputes Redressal Commission (NCDRC) directed the developer to complete construction and compensate the complainants. In unrelated proceedings, a bank initiated…