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2023 DIGILAW 299 (KER)

John Jacob v. Anil Davidson

2023-03-22

SHAJI P.CHALY

body2023
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. 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 Procedure against M/s. Samson and Sons Builders & Developers Private Limited, evident from Annexure A. Subsequently, as per an order dated 12.11.2021, the National Company Law Tribunal, Kochi, has appointed one Lukose Joseph as Interim Resolution Professional, evident from Annexure B. Thereafter, the Interim Resolution Professional has issued a public notice calling the attention of creditors of M/s. Samson and Sons Builders & Developers Private Limited, to submit their claims, evident from Annexure C. 6. The sum and substance of the contention advanced is that during the pendency of the proceedings before the Company Law Tribunal, the execution petition cannot be proceeded with against the company and its directors. It is further pointed out that apart from the company, the director of the company is not made a party in a personal capacity. 7. In fact, the learned counsel for respondents has invited my attention to the orders passed by the State Consumer Commission and the National Commission and submitted that the questions raised by the petitioners were considered and the reliefs sought for by the petitioners were declined. It is also contended that apart from the company, the director was a party to the proceedings before the Consumer Commission and therefore, there is nothing standing in the way of proceeding against the Director of the company in question. 8. Learned counsel for petitioners in that regard has invited my attention, specifically to paragraph 6 of the judgment of the Apex Court in Nag Leathers (P) Ltd. v. Dynamic Mktg. Partnership, (2022) 2 SCC 271 , wherein it is held that, “in that case, apart from the corporate debtor, certain natural persons who were stated to be in charge of and responsible for the affairs of the corporate debtor were also arrayed as accused and, as such, the proceedings under Sections 138/141 of the Act were allowed to be continued as against such natural persons.” 9. However, in Nag Leathers (supra) the company alone was the party and therefore, the judgment rendered by the Apex Court earlier in respect of the Directors in the party array in their personal capacity was distinguished and certain directions were issued. In my considered opinion, this is a case where apart from the Company, the Managing Director of the company was a party in person. Merely because the address was shown is that of the company, it cannot be said that he is not personally arrayed as a party before the Consumer Commission. Learned counsel for the petitioners has also a contention that the judgment was rendered by the Apex Court in Nag Leathers (supra), after the orders were passed by the State Commission as well as the National Commission and therefore, the State Commission is duty bound to consider Exhibit P10 execution application pending before it. 10. I have heard learned counsel for petitioners - Sri. 10. I have heard learned counsel for petitioners - Sri. Thomas P. Kuruvila, learned counsel appearing for respondents 1 & 2 – Smt. Ligey Antony & Sri. L. Mohanan, learned counsel for respondent No.3 – Smt. D. Reetha and perused the pleadings and material on record. 11. The elaborate discussion of facts made above would make it clear that in spite of securing an order from the State Consumer Commission, and the challenge made by the petitioners were declined by the National Commission as well the Apex Court, the execution petition is unable to be taken to logical conclusion consequent to the intervening circumstances, including the instant proceedings. In my considered opinion, in Nag Leathers, the Apex Court held that if IBC proceedings are pending before the Tribunal, only the Company alone cannot be proceeded with. Here is a case where the Managing Director was a party in person before the State Consumer Commission. 12. In that view of the matter, I have no hesitation to say that the petitioners are not entitled to get any relief especially due to the principles of law laid down by the Apex Court in Nag Leathers. Moreover, the issues raised by the petitioners were considered by the State Commission as well as National Commission and the reliefs sought for by the petitioners on account of the same were declined. In that view of the matter, I do not think the petitioners have made out any case of arbitrariness, illegality or any other legal infirmities, susceptible to be interfered in a proceeding under Article 226 of the Constitution of India. Needless to say, the writ petition fails, accordingly, it is dismissed.