Rani Mehra vs M/s Logix Infrastructure Private Limited Through Its Directors

Ram Surat Ram Maurya, Presiding Member

Heard counsel for the applicants on maintainability of the execution applications.

Above execution applications have been filed for executing the decree dated 11.07.2023 passed in CC/729/2017. The operative portion of the order is quoted below:-

“In view of aforesaid discussions, the complaint is partly allowed. The opposite party is directed to complete construction in all respect as per specification, obtain “occupation certificate” from statutory authority within a period of four months from the date of this judgment and handover possession of the flats allotted to the complainants after taking balance amount from them without any further delay and execute conveyance deeds in their favour. Along with final statement of account, the opposite party shall give delay compensation to the complainants in the form of interest @6% per annum on their deposit from due date of possession till the offer of possession, adjusting the period of six months or two years for force majeure as mentioned in paragraph-8 of this judgment.”

It is admitted to the applicants that proceeding under Insolvency and Bankruptcy Code, 2016 was initiated against M/s Logix Infrastructure Pvt. Ltd., who was the sole opposite party in the complaint. The National Company Law Tribunal by its order dated 14.07.2023 imposed moratorium against the opposite party (JD-1 herein). As per Section 14 of Insolvency and Bankruptcy Code, 2016,  on imposition of moratorium, institution of suits or continuation of pending suits or proceeding against corporate debtor including execution of any judgment, decree or order in any Court of law, Tribunal, Panel or other authority, has been banned. Thus, ignoring the prohibition as contained under Section 14 of Insolvency and Bankruptcy Code, 2016 these execution applications have been filed on 04.08.2023. Therefore, in view of the order of National Company Law Tribunal dated 14.07.2023 passed in (IB) - 237 (ND)/2023, the present execution applications cannot be maintained.

The counsel for the decree holder relying upon the judgment of Supreme Court in Anjali Rathi and Ors. vs. Today Homes & Infrastructure Pvt. Ltd. & Ors. 2021 SCC OnLine SC 729 and submits that execution proceedings can be initiated against the Directors of judgment debtor No.1, who have been arrayed as opposite parties No. 2 to 7 in the present execution applications.

So far as judgment in Anjali Rathi case (supra) is concerned, in that case the Directors have given undertaking for satisfying the decree during pendency of the proceeding under Insolvency and Bankruptcy Code, 2016. Therefore, in view of the undertaking of the Directors, the Supreme Court has permitted to continue the execution proceedings against the Directors. In the present case, there is no such undertaking. In fact, the decree was passed against M/s Logix Infrastructure Pvt. Ltd. (judgment debtor No.1) alone. It is well settled that what cannot be done directly, cannot be permitted to be done indirectly. If in view of moratorium imposed by National Company Law Tribunal the execution proceeding cannot be instituted/initiated against M/s Logix Infrastructure Pvt. Ltd, then it cannot be permitted to be initiated against its Directors.

ORDER

In view of the aforesaid discussion the execution applications are not maintainable and are hereby dismissed with liberty to the decree holders to set up their claim before National Company Law Tribunal in the above bankruptcy petition.