IMPORTANT POINTS
Execution of decree – Only because there is a moratorium under Section 14 of IBC against company, it cannot be said that no proceedings can be initiated against directors/officers of company for execution, provided that they are otherwise liable to abide by and comply with order which is passed against company.

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:

“.....(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 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 Rs. 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 directions 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.

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 Court in the case of P. Mohanraj vs. Shah Bros. Ispat (P) Ltd. (2021) 6 SCC 258. Our attention is also invited to another decision of this Court in the case of Anjali Rathi and Others vs. Today Homes and Infrastructure Pvt. Ltd. and Others, (2021) SCC Online SC 729. 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