Ansal Crown Heights Flat Buyers Association (REGD.) Vs Ansal Crown Infrabuild Pvt. Ltd. & Ors. (Supreme Court of India)
The Supreme Court addressed the conflict between the rights of homebuyers and the implications of the Insolvency and Bankruptcy Code (IBC) in the case of Ansal Crown Heights Flat Buyers Association (REGD.) vs. Ansal Crown Infrabuild Pvt. Ltd. & Ors. The dispute arose over the execution of a directive from the National Consumer Disputes Redressal Commission regarding the completion of a housing project.
The crux of the matter lay in whether the moratorium under Section 14 of the IBC would prevent executing the directive against the company and its directors/officers. The appellants argued that the IBC does not prohibit action against directors/officers even if the company is under moratorium. They cited Section 32A of the IBC and relevant precedents to support their stance.
On the other hand, respondents contended that the directive did not hold the directors/officers liable and that they were not parties to the main complaint. The National Commission’s failure to address their liability was highlighted.
The Supreme Court analyzed the provisions of the IBC and previous judgments, particularly the case of Mohanraj vs. Shah Bros. Ispat (P) Ltd. It emphasized that the moratorium only applies to the corporate debtor, leaving directors/officers liable. The Court upheld the view that proceedings against directors/officers can continue despite the moratorium.
