Ansal Crown Heights Flat Buyers Association (Regd.) Vs Ansal Crown Infrabuild Pvt. Ltd. & Ors. (Supreme Court of India)
Execution Is Not a Shortcut to Fix Personal Liability- Execution Is Decree-Bound: No Personal Liability of Directors Without Adjudication: Supreme Court
The Supreme Court reaffirmed the fundamental principle of execution law that an executing forum cannot travel beyond the decree. In the present case, although the directors/promoters of the builder company were initially impleaded in the consumer complaints, the NCDRC, at the admission stage itself, consciously declined to issue notice to them and directed that the complaints proceed only against the company. That order was never challenged and thus attained finality.
The complaints were ultimately allowed solely against the company, and no pleadings, evidence, or findings were ever recorded against the directors. The Supreme Court held that in such circumstances, execution proceedings cannot be used as a surrogate adjudicatory forum to fasten liability on persons who were neither parties to the final order nor adjudged liable.
The Court emphasized that directors do not incur personal liability merely by virtue of their position, unless there is a specific adjudication, a personal guarantee, a statutory liability, or a clear finding justifying lifting of the corporate veil. Importantly, while reiterating that the IBC moratorium under Section 14 protects only the corporate debtor and not its directors, the Court clarified that absence of moratorium protection does not automatically create liability. Executability still depends on an independent legal foundation, which was entirely absent in this case.
Reiterating settled law, the Court held that execution must strictly conform to the decree, and liability cannot be enlarged or shifted at the execution stage. Accordingly, the dismissal of execution proceedings against the directors by the NCDRC was upheld. However, the Court clarified that this would not bar the flat buyers from pursuing any other remedies available in law against the directors, subject to statutory requirements
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
