TaxTMI 
TaxTMI 
2026 (1) TMI 846
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....e National Consumer Disputes Redressal Commission [NCDRC] dismissing Execution Application Nos. 27/2023 and 28/2023 filed by the appellant against the respondents 2 to 9 (directors/promoters of M/s. Ansal Crown Infrabuild Pvt. Ltd. [ACIPL]). Such applications arose from two final orders rendered by the NCDRC while deciding complaints lodged by the appellant bearing nos. CC/2600/2018 and CC/86/2018 respectively. FACTUAL BACKGROUND 2. Appellant is an association of flat buyers which entered into Flat Buyer Agreements with ACIPL for units in Ansal Crown Heights. Vide individual builder buyer agreements, ACIPL promised to handover possession of the apartments within a period of 36 months from the date of execution of the agreements, which expired for all the buyers in the time period from December, 2013 - December, 2015. Possession of the flats not having been delivered, the appellant instituted two consumer complaints - the first on 10th, January 2018 (on behalf of 45 flat buyers), and the second on 26th November, 2018 (on behalf of 20 flat buyers). The respondents were ACIPL and its directors/promoters being the respondents 2 to 9. 3. While admitting CC/86/2018, the NCDRC vi....
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.... against the respondents 2 to 9, while granting them liberty to raise all available objections, including the plea that they were not liable to satisfy or implement the order sought to be executed. This Court held that the moratorium under Section 14 of the IBC shields only the corporate debtor and does not extend to directors/promoters. 8. Upon revival, the appellant pressed the execution applications against the respondents 2 to 9. As noted, the NCDRC dismissed the execution applications insofar as they sought to proceed against the respondents 2 to 9, holding that the order is executable only against ACIPL, the sole respondent in the original complaints. ISSUE 9. The core controversy lies within a narrow compass. Question that arises is, can persons who were arrayed as respondents in the consumer complaints but ultimately against whom no notice was issued and the complaints did not proceed, could be brought within the net of execution, on the premise that they were directors/promoters of the judgment-debtor company. NCDRC has answered this question in the negative. We are called upon to decide whether such view warrants interference. ANALYSIS AND OBSERVATIONS 10. ....
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....ther pleaded nor established that the respondents 2 to 9 had furnished any guarantee or surety in respect of the investment made in the project, nor has any material been placed on record to attract the application of Section 14(3) of the IBC. 15. Once a moratorium has been declared against the judgment debtor company, i.e., ACIPL, the modes of execution contemplated under Section 71 of the Consumer Protection Act, 20196 including attachment and sale of movable or immovable property, attachment of bank accounts, or withdrawal of decretal amounts from the accounts of the judgment debtor, stand interdicted. Execution proceedings cannot, therefore, be permitted to continue indirectly against the respondents 2 to 9, who are neither judgment debtors nor guarantors, and against whom no independent liability under the order allowing the complaints has been established. 16. This Court in Electronics Corpn. of India Ltd. v. Secy., Revenue Deptt., Govt. of A.P. [ (1999) 4 SCC 458] underscored that a clear distinction must be maintained between a company and its shareholders by observing as follows: "15. A clear distinction must be drawn between a company and its shareholder, e....
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....side 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. 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." (emphasis ours) 20. A plain reading of the said order shows that it addressed a limited issue, namely, whether the existence of a moratorium under Section 14 of the IBC, against ACIPL, operated as a bar to the continuation of execution proceedings against its directors/promoters. This Court held that the moratorium, by itself, does not preclude execution proceedings against directors or officers, provided they are otherwise liable. 21. Impo....