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2024 Supreme(Online)(Del) 32651

IN THE HIGH COURT OF DELHI AT NEW DELHI
Sanjeev Narula, J
RAKESH KHANNA – Appellant
Versus
NAVEEN KUMAR AGGARWAL & ORS. – Respondent
W.P.(C) 13098/2024



Advocates:
For the Appellants/Petitioners: Mr. Saurav Kr., Mr. Rajesh Kr., Mr. J. S. Matta
For the Respondents: None

A director is liable to ensure compliance with consumer commission orders, regardless of their tenure during the original complaint, under the Consumer Protection Act.

Headnote:(A) Consumer Protection Act, 1986 - Section 17, Section 72 - High Court challenge against NCDRC order - Issuance of warrants of arrest against directors of a company for non-compliance - Directors must ensure compliance with consumer commission orders irrespective of the timing of their directorship. (Paras 7, 8, 12)

(B) Enforcement of Orders - State Consumer Disputes Redressal Commission has the jurisdiction to enforce its order through arrest warrants when companies fail to comply with orders, holding directors accountable. (Paras 6, 12)

Facts of the case:
The Petitioner challenges the NCDRC's decision upholding arrest warrants for non-compliance with a consumer court ruling regarding deficiency of service, based on timing of directorship.

Findings of Court:
The Petitioner bears responsibility for compliance as a current director, even though he claims he wasn't in charge during the initial violation.

Issues: Whether the director can be held liable for compliance issues stemming from actions before their directorship.

Ratio Decidendi: The Petitioner’s liabilities arise from his role at the time of enforcement proceedings, not when the initial action occurred, highlighting the distinction between types of liability.

Result: Petition dismissed.

Table of Content
1. objective of the proceedings against directors for consumer complaints. (Para 4)
2. petitioner’s argument against personal liability and grounds for the complaint. (Para 5)
3. court's analysis on enforcement orders and director responsibilities. (Para 6 , 7 , 8 , 9 , 10 , 11)
4. final decision and dismissal of the petition. (Para 12 , 13)

JUDGMENT

SANJEEV NARULA, J. (Oral):

CM APPL. 54739/2024 (seeking condonation of delay)

1. For the grounds and reasons stated in the application, the same is allowed. Delay of 30 days in filing the present writ petition is condoned.

2. Disposed of.

W.P.(C) 13098/2024

3. The Petitioner has filed the instant petition assailing the order dated 9th July, 2024. Through the said order, the National Consumer Disputes Redressal Commission, [(“NCDRC”)] upheld the arrest warrants issued against the Petitioner in the capacity of Director of VXL Realtors Pvt. Ltd by the State Consumer Disputes Redressal Commission, Delhi,, [(“SCDRC”)] on 19th March, 2024, and 16th May, 2024. These warrants were issued during proceedings to enforce the final order dated 16th Match, 2021, passed against the Company.

Factual Background

4. The factual background leading to the initiation of the present proceedings is as follows:

4.1 Respondent No. 1, Mr. Naveen Kumar Aggarwal, filed a complaint under Section 17 of the Consumer Protection Act, 1986 , alleging deficiency of services and unfair trade practices by VXL Realtors Pvt. Ltd., Respondent No. 4. By a judgment dated 16th March, 2024, the SCDRC granted relief to the Complainant, directing Respondent No. 4 to refund the entire amount paid by the Complainant, with interest, along with compensation and litigation costs.

4.2 Respondent No. 1 filed execution application bearing no. EA/17/2022, for the enforcement of the aforesaid order. In the execution proceedings, warrants of arrest were issued against the directors of Respondent No. 4, the Judgement Debtor vide order dated 19th March, 2024, whereby the Petitioner was named as one of the directors.

4.3 The Petitioner applied for recall of the order dated 19th March, 2024 (I.A. 1421/2024) to the extent that it directed issuance of warrants of arrest against him. The said application was decided through order dated 16th May, 2024 to the following effect:

“IA-1421/24 IN EA-17/22

Vide detailed order dated 19.03.2024, warrants of arrest were issued against Mr. Rakesh Khanna & Ms. Suman Kumar Nagpal, Directors of the JD.

However, no report has been received.

Mr. Suraj Prakash, counsel has appeared through VC on behalf of Mr. Rakesh Khanna (Director of JD) and they have moved an application IA-1421/24 vide diary no. 6865 dated 10.05.2024 for recalling the order dated 19.03.2024 passed by this Commission to the extent it directed issuance of warrants of arrest against the applicant with supporting affidavit.

Warrants of arrest were issued against Mr. Rakesh Khanna, Director of JD on 19.03.2024, is also present on VC.

Let him appear in the Court.

Mr. Rakesh Khanna, Director of JD submits that original papers of flat may be handed over to him so that he can put up the same for sale and return the money of the DH.

Original documents of flat cannot be returned to Mr. Rakesh Khanna (Director of JD), especially when there is a decree passed against him and warrants of arrest have already been issued.

Mr. Rakesh Khanna, Director of JD is not present in Court and rather in his application he is disputing that he is not a shareholeder of JD/company.

There is no merit in IA-1421/2024 and the same stands dismissed.

In compliance of order dated 19.03.2024, issue fresh warrants of arrest against the following Directors of the JD as per the details furnished by the learned counsel for the DH, executable through the concerned officials mentioned below:

S.No.DETAILS OF DIRECTORSEXECUTABLE THROUGH
1.Mr. Rakesh Khanna (Director of VXL Realtors) DIN No. 09008530 s/o Mr. Tilak Raj Khanna 3207, Sector-21 D, Chandigarh – 160022S C PS ector-19 handigarh
2.Ms. Su

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