Insolvency proceedings against a company do not necessarily halt personal liability for directors if they are parties in person before consumer dispute commissions.

JUDGMENT :

This writ petition is filed by the petitioners seeking the following directions:

(1) Call for the records leading to E.P. No.14 of 2017 in CC No.84 of 2016 pending before the Kerala State Consumer Disputes Redressal Commission, Thiruvananthapuram and set aside the same

(2) Issue an order or direction directing the State Consumer Disputes Redressal Commission to recall the non-bailable warrant dated 31-05-2022 issued against the Petitioners

(3) Issue a direction directing the 3rd respondent to conduct EP No.14 of 2017 in CG No.84 of 2016 pending before the State Consumer Redressal Commission on behalf of the Corporate Debtor by virtue of Section 17 of the Code.

2. Brief material facts for the disposal of the writ petition are as follows: petitioners were the Managing Director and Director, respectively, of M/s. Samson and Sons Builders and Developers Pvt. Ltd., which is engaged in the construction of multistoried residential and commercial complexes. According to the petitioners, while the projects were in different stages of construction, due to financial stringency and various other reasons, the company could not complete the projects as agreed upon with the purchasers. The respondents herein, preferred C.C. No.84 of 2016 before the Kerala State Consumer Disputes Redressal Commission, Thiruvananthapuram, inter alia for a direction to the opposite parties therein, to pay an amount of Rs.25,50,000/- with interest. According to the petitioners, consequent to the registration of a criminal case, they were remanded in judicial as well as police custody and hence, were not in a position to engage a lawyer to appear and defend the case.

3. Anyhow, it is an admitted fact that the Consumer Disputes Redressal Commission passed Exhibit P2 ex parte order dated 2.12.2016 allowing Exhibit P1 complaint in part, thereby directing the opposite parties to pay to the complainants i.e., the respondents herein, an amount of Rs.25,50,000/- with interest @ 12% per annum. Thereafter, respondents filed E.P. No.14 of 2017 in C.C. No.84 of 2016 for execution of the order, also invoking section 27 of the Consumer Protection Act.

4. According to the petitioners, at that point of time, the petitioners were granted bail, and consequently filed Exhibit P4 – E.A.No.1 of 2018 in EP No.14 of 2017, with a prayer to dismiss Exhibit P3 with an option to the respondents to file an application under section 25 of the Act, if they so desires. The State Commission as per Exhibit P5 order dated 25.7.2019, dismissed Exhibit P4. The said order was challenged before the National Consumer Disputes Redressal Commission as per FA No.1671 of 2016 and AE No.68 of 2019, respectively, which were dismissed as per Exhibit P6 common order. Though the petitioners approached the Apex Court challenging Exhibit P6 common order, vide SLP Nos.28016 & 28017 of 2019, the Hon'ble Apex Court, by Exhibit P7 order, dismissed the SLPs as withdrawn. Now the case projected by the petitioners is that the petitioners have filed Exhibit P10 Execution application before the State Consumer Commission, which is pending consideration; and it is thus seeking disposal of the same, the writ petition is basically filed.

5. The contentions advanced in the execution application pending before the State Commission is that one Vijayakumaran K. had instituted proceedings against the Company under Section 9 of the Insolvency and Bankruptcy Code - 2016 r/w. Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, before the National Company Law Tribunal, Kochi Bench as CP(IB)/05/KOB/2021. According to the petitioners, the National Company Law Tribunal, as per order dated 3.11.2021 found that in the nature of debt owed to the petitioner therein is an operational debt as defined under Section 5(21) of the Code and that, there is a default as defined under Section 3(12) of the Code; and that, it is a fit case to admit and order initiation of Corporate Insolvency Resolution Pro