In Brief
A real estate developer sought to stay NCDRC penalty proceedings by invoking interim moratorium protections under the Insolvency and Bankruptcy Code. The Court held that regulatory penalties imposed by consumer forums for non-compliance with consumer protection laws fall outside the scope of insolvency moratorium. Such penalties serve a public interest regulatory function, not debt recovery, and thus do not constitute 'debt' under the IBC. The moratorium under Section 96 of the IBC protects only financial debts, expressly excluding fines imposed by tribunals. Allowing stay of consumer penalties would enable businesses to flout consumer protection mandates through insolvency proceedings, contrary to legislative intent and public policy. The appeal was dismissed.
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