Anjali Rathi vs Today Homes & Infrastructure Pvt. Ltd.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(SC) 1070

SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, VIKRAM NATH, HIMA KOHLI, JJ.
Anjali Rathi and Others - Appellants
Versus
Today Homes & Infrastructure Pvt. Ltd. and Others - Respondents
SLP (C) No. 12150 of 2019
With
Anjali Rathi & Etc. - Appellant
Versus
Today Homes & Infrastructure Pvt. Ltd. - Respondents
Civil Appeal Nos.5231-38 of 2019
With
Varun Gupta and Others – Appellants
Versus
Today Homes & Infrastructure Pvt. Ltd. and Another - Respondent
SLP (C) No.___________of 2021 (Arising out of SLP (C) Diary No. 45043 of 2019)
Decided on : 08-09-2021.

Advocates:
Advocate Appeared:
For the Appellant : Mr. Pawanshree Agrawal, Adv
For the Respondent: Mr. Himanshu Satija, Mr. E. C. Agrawala, Mr. Manoj Yadav,
Mr. Sushil Kaushik, Mr. Ranbir Singh Yadav, Mrs. Shally Bhasin, Mr. Ayush Sharma, Mr. Aditya Parolia, Mr. Piyush Singh, Mr. Nithin Chandran, Mr. Akshay Srivastava, Ms. Aditi Sinha, Mr. Rajesh Kumar, Mr. Gaurav Goel, AOR

Headnote:
Consumer Protection Act 1986 – Sections 25, 27 – Negotiable Instruments Act, 1881 – Sections 141(1), (2) – Insolvency and Bankruptcy Code, 2016 – Section 9, 14, 9(5), 73 – Special Leave Petitions – Civil appeal – Petitioners are home buyers in a group housing project, Canary Greens in Sector 73, being developed by first respondent – Home buyer agreements were entered into between eleven petitioners and first respondent. Clause 21 of agreements envisaged that possession of apartments would be delivered within a period, which in almost all cases – Held, Court thus clarify that petitioners would not be prevented by moratorium under Section 14 of IBC from initiating proceedings against promoters of first respondent Corporate Debtor in relation to honoring settlements reached before this Court – 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 – In view of above directions, shall stand disposed of as well as, being Civil Appeal – Liberty is granted to petitioners to take recourse to remedies which are available in law after decision of Adjudicating Authority on approval application under Section 31(1), and subject to consequence thereafter – Since corporate debtor would be covered by the moratorium provision contained in Section 14 IBC, by which continuation of Sections 138/141 proceedings against corporate debtor and initiation of Sections 138/141 proceedings against said debtor during corporate insolvency resolution process are interdicted, what is stated would then become applicable – Legal impediment contained in Section 14 IBC would make it impossible for such proceeding to continue or be instituted against corporate debtor – Thus, for period of moratorium, since no Sections 138/141 proceeding can continue or be initiated against corporate debtor because of a statutory bar, such proceedings can be initiated or continued against persons mentioned in Sections 141(1) and (2) of Negotiable Instruments Act – This being case, it is clear that moratorium provision contained in Section 14 IBC would apply only to corporate debtor, natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of Negotiable Instruments Act – Appeal disposed of.

JUDGMENT :

Dhananjaya Y. Chandrachud, J

1. The petitioners are home buyers in a group housing project, Canary Greens in Sector 73, Gurgaon, being developed by the first respondent. Home buyer agreements were entered into between the eleven petitioners and the first respondent. Clause 21 of the agreements envisaged that possession of the apartments would be delivered within a period of thirty-six months, which in almost all cases was to be in 2014.

2. The grievance of the petitioners is that the project was abandoned by the developer. As a result, they instituted proceedings¹[Consumer Complaint Nos 1242, 1243, 1245, 1246, 1248, 1249, 1250 and 1251 of 2017] before the National Consumer Dispute Redressal Commission²[“NCDRC”] seeking refund of their moneys with interest. On 12 July 2018, the NCDRC allowed their claim by directing the first respondent to refund the principal amount paid by the petitioners together with 12 per cent interest from the date of deposit along with costs within four weeks. There was a provision in the order for interest being enhanced to 14 per cent if the amount was not paid within the stipulated period. This order of the NCDRC has attained finality.

3. Execution proceedings³[EA Nos 158, 159, 161-162, 164-166 and 168 of 2018] under Sections 25 and 27 of the Consumer Protection Act 1986⁴[“COPRA”] were instituted by the petitioners. The NCDRC issued notice on 7 September 2018. In the meantime, certain orders were passed by the NCDRC on 23 October 2018 in separate execution proceedings pertaining to other home buyers in the same housing project. The first respondent challenged this order of the NCDRC before the High Court of Delhi⁵[CM(M) No 1391 of 2018], and by an order dated 19 November 2018, the order of the NCDRC dated 23 October 2018 was stayed by the Delhi High Court.

4. The execution proceedings initiated by the petitioners were adjourned by the NCDRC on 13, 25 and 26 February 2019. Certain settlement terms were offered by the judgment debtor on 27 February 2019, which were not acceptable to the decree holders. On 5 March 2019, the proceedings were again adjourned to explore the proposals furnished by the first respondent. Eventually, on 11 March 2019, since no settlement was arrived at, the Managing Director of the first respondent was directed to appear personally. The first respondent filed a petition⁶[CM(M) No 494 of 2018] before the Delhi High Court to challenge the order of the NCDRC requiring the personal presence of the Managing Director. By an order dated 27 March 2019, the Delhi High Court issued notice to the petitioners and also issued a direction that no coercive steps shall be taken against the Managing Director of the first respondent in terms of the order dated 11 March 2019 passed by the NCDRC. That has given rise to the first in the batch of Special Leave Petitions before this Court, namely, SLP (C) No 12150 of 2019.

5. On 1 April 2019, the NCDRC passed a further order in the course of the execution proceedings. Paragraph 14 of the order is extracted below:

(emphasis supplied)

Thus, the execution applications were disposed of. The order of the NCDRC has resulted in the filing of appeals before this Court, being Civil Appeal Nos.5231-5238 of 2019, by the petitioners/appellants for the limited purpose of challenging the fin