Full Judgment Text
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2024 INSC 54
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 4480-4481 OF 2023
ANSAL CROWN HEIGHTS FLAT BUYERS
ASSOCIATION (REGD.) …...APPELLANT(S)
VERSUS
M/S. ANSAL CROWN INFRABUILD
PVT. LTD. & ORS. …...RESPONDENT(S)
WITH
CIVIL APPEAL NO(S). 4247 OF 2023
JUDGMENT
ABHAY S. OKA, J.
1. The impugned orders in these appeals are more or less
identical. Therefore, we are making a reference to the factual
aspects in Civil Appeal Nos. 4480-4481 of 2023. In a complaint
filed by the homebuyers before the National Consumer Disputes
Redressal Commission (for short ‘the National Commission’), an
order was made by the National Commission directing the Developer
to complete the project in all respects and handover the possession
of the allotted flats/apartments to the members of the Association
of the homebuyers within the time specified. In the said order, a
direction was issued giving an option to the homebuyers, which
reads thus: -
Signature Not Verified
Digitally signed by
Neetu Khajuria
Date: 2024.01.24
10:32:35 IST
Reason:
“...(vi) If the Members of the Complainant
Association are not interested to wait any more for
taking possession of the allotted Apartment and they
want refund of the their deposited amount, the
Opposite Party Developer shall refund the entire
deposited amount along with interest @9% p.a. from
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the respective date of deposit till payment, within a
period of six weeks from today failing which the
amount shall carry interest @ 12% p.a. for the said
period. The Allottees shall also be entitled for a
₹
sum of 25,000/- as costs.”
2. It is this direction which was sought to be executed by the
appellants by filing execution applications. The developer is a
company against whom the National Commission issued the aforesaid
direction. The said company is the subject-matter of the
proceedings under Section 9 of the Insolvency and Bankruptcy Code,
2016 (for short ‘the IBC’). The National Company Law Tribunal (for
short ‘the NCLT’) has admitted the petition filed under Section 9
of the IBC against the said company. The appellants sought to
execute the direction(s) of the National Commission not only
against the company but also against the several individuals.
3. By the impugned orders, the National Commission held that the
decree cannot be executed against the company due to the operation
of the moratorium under Section 14 of the IBC. Thereafter, the
National Commission observed that in view of moratorium against the
company, it would not be appropriate to proceed in the same
execution against the opposite party Nos. 2 to 9. Another
observation was made that other opposite parties (opposite party
Nos. 2 to 9 to the execution application) were not parties in the
main complaint. The appellant is the applicant/decree holder in the
execution applications.
4. The submission in brief of the appellants is that under the
provisions of the IBC, there is no prohibition on proceeding
against the directors/officers of the company, which is the
subject-matter of moratorium under Section 14 of the IBC.
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5. A reliance is placed by the appellant on the second proviso to
sub-Section (1) of Section 32A of the IBC and a decision of this
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Court in the case of P. Mohanraj vs. Shah Bros. Ispat (P) Ltd. .
Our attention is also invited to another decision of this Court in
the case of Anjali Rathi and others vs. Today Homes and
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Infrastructure Pvt. Ltd. And Others . Hence, the submission is that
the view taken by the National Commission is erroneous.
6. Mr. Nikhil Nayyar, the learned senior counsel appearing for
the respondent Nos. 2, 4, 5, 6, 7 and 8 and Mr. Pradeep Aggarwal,
the learned counsel appearing for the respondent Nos. 3 and 9
submitted that under the order which is sought to be executed,
there is no liability fastened on the opposite party Nos. 2
to 9(the respondent Nos. 2 to 9). It is submitted that the National
Commission has held that opposite party Nos. 2 to 9(the respondent
Nos. 2 to 9) were not parties to the main complaint. Their
submission is that in the case of Anjali Rathi (supra), this Court
made a departure by permitting the appellants to proceed against
the promoters of the company, which was subject to moratorium only
because there was a settlement arrived at between them before this
Court. He further submitted that these opponents cannot be held
liable.
7. We may note here that the National Commission has not made any
adjudication on the question whether the opposite party Nos. 2
to 9(the respondent Nos. 2 to 9) in the execution application were
under an obligation to abide by the directions issued against the
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(2021) 6 SCC 258
2 (2021) SCC OnLine SC 729
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company. This issue has not been considered at all by the National
Commission. There is no finding recorded by the National Commission
that in view of any particular provision of the IBC, moratorium
will apply to the directors/officers of the company.
8. In the case of Anjali Rathi (supra), a Bench of three Hon’ble
Judges has quoted with approval paragraph ‘102’ of its earlier
judgment in the case of P. Mohanraj (supra). Paragraph ‘102’ in the
case of P. Mohanraj (supra), which reads thus:-
“ 102. Since the corporate debtor would be covered
by the moratorium provision contained in Section
14 IBC, by which continuation of Sections 138/141
proceedings against the corporate debtor and
initiation of Sections 138/141 proceedings against
the said debtor during the corporate insolvency
resolution process are interdicted, what is staed
in paras 51 and 59 in Aneeta Hada [Aneeta Hada v.
Godfather Travels & tours (P) Ltd., (2012) 5 SCC
661 : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri)
241] would then become applicable. The legal
impediment contained in Section 14 Ibc would make
it impossible for such proceedings to continue or
be instituted against the corporate debtor. Thus,
for the period of moratorium, since no Sections
138/141 proceeding can continue or be initiated
against the corporate debtor because of a
statutory bar, such proceedings can be initiated
or continued against the persons mentioned in
Sections 141(1) and (2) of the Negotiable
Instruments Act. This being the case, it is clear
that the moratorium provision contained in Section
14 IBC would apply only to the corporate debtor,
the natural persons mentioned in Section 141
continuing to be statutorily liable under Chapter
XVII of the Negotiable Instruments Act.”
(Underline supplied)
9. What is relevant is paragraph ‘18’ in the case of Anjali Rathi
(supra), which reads thus: -
“18. We thus clarify that the petitioners would not be
prevented by the moratorium under Section 14 of the IBC
from initiating proceedings against the promoters of
the first respondent Corporate Debtor in relation to
honoring the settlements reached before this Court.
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However, as indicated earlier, this Court cannot issue
such a direction relying on a Resolution Plan which is
still pending approval before an Adjudicating
Authority.”
10. Thus, this Court approved the view taken in the case of P.
Mohanraj (supra) that notwithstanding moratorium, the liability, if
any, of the directors/officers will continue. This Court,
therefore, permitted the appellants to expressly proceed against
the promoters of the company though there was a moratorium under
Section 14 of the IBC affecting the company.
11. Therefore, we are of the view that only because there is a
moratorium under Section 14 of the IBC against the company, it
cannot be said that no proceedings can be initiated against the
opposite party Nos. 2 to 9(the respondent Nos. 2 to 9) for
execution, provided that they are otherwise liable to abide by and
comply with the order, which is passed against the company. The
protection of the moratorium will not be available to the
directors/officers of the company.
12. Therefore, we set aside the impugned judgments and orders and
remit the execution application to the National Commission. The
execution will continue against the opposite party Nos. 2 to 9(the
respondent Nos. 2 to 9) in the execution application.
13. It is open for the opposite party Nos. 2 to 9(the respondent
Nos. 2 to 9) to raise a contention that they are not bound to
implement the order sought to be executed. They are entitled to
file additional objections along with documents raising the issue
of executability as against them.
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14. We clarify that the issue whether opposite party Nos. 2 to
9(the respondent Nos. 2 to 9) to the execution are otherwise
liable, will have to be decided by the National Commission in
accordance with law.
15. The appeals are partly allowed on the above terms.
16. Pending application(s), if any, shall stand disposed of.
…………………………...J.
[ABHAY S. OKA]
…………………………...J.
[UJJAL BHUYAN]
NEW DELHI;
JANUARY 17, 2024.