STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Sh. Ashish Mohan Gupta, Managing Director, M/s Hind Motors (India) Ltd., House No.161, Sector 27A, Chandigarh.

…..Petitioner.

VERSUS

Sh. Om Parkash Dabla son of Late Sh. Hari Singh, resident of House No.238, Sector 20A, Chandigarh.

…..Respondent.

ARGUED BY:

Sh. Karan Gaba, Advocate for the revision petitioner.

Sh. Om Parkash Dabla, respondent in person.

Sh. Ashish Mohan Gupta, Managing Director, M/s Hind Motors (India) Ltd., House No.161, Sector 27A, Chandigarh.

…..Petitioner.

VERSUS

Sh. Gamdur Singh son of Sh. Ajmer Singh, resident of H.No.2557, Phase XI, Sector 65, Mohali, SAS Nagar.

…..Respondent.

ARGUED BY:

Sh. Karan Gaba, Advocate for the revision petitioner.

Sh. Om Parkash Dabla, Advocate for the respondent.

Sh. Ashish Mohan Gupta, Managing Director, M/s Hind Motors (India) Ltd., House No.161, Sector 27A, Chandigarh.

…..Petitioner.

VERSUS

Sh. Gamdur Singh son of Sh. Ajmer Singh, resident of H.No.2557, Phase XI, Sector 65, Mohali, SAS Nagar.

…..Respondent.

ARGUED BY:

Sh. Karan Gaba, Advocate for the revision petitioner.

Sh. Om Parkash Dabla, Advocate for the respondent.

Sh. Ashish Mohan Gupta, Managing Director, M/s Hind Motors (India) Ltd., House No.161, Sector 27A, Chandigarh.

…..Petitioner.

VERSUS

Smt. Bhupinder Kaur w/o Sh. Gamdur Singh, resident of H.No.2557, Phase XI, Sector 65, Mohali, SAS Nagar.

…..Respondent.

ARGUED BY:

Sh. Karan Gaba, Advocate for the revision petitioner.

Sh. Om Parkash Dabla, Advocate for the respondent.

Sh. Ashish Mohan Gupta, Managing Director, M/s Hind Motors (India) Ltd., House No.161, Sector 27A, Chandigarh.

…..Petitioner.

VERSUS

Smt. Bhupinder Kaur w/o Sh. Gamdur Singh, resident of H.No.2557, Phase XI, Sector 65, Mohali, SAS Nagar.

…..Respondent.

ARGUED BY:

Sh. Karan Gaba, Advocate for the revision petitioner.

Sh. Om Parkash Dabla, Advocate for the respondent.

Sh. Ashish Mohan Gupta, Managing Director, M/s Hind Motors (India) Ltd., House No.161, Sector 27A, Chandigarh.

…..Petitioner.

VERSUS

Smt. Bhupinder Kaur w/o Sh. Gamdur Singh, resident of H.No.2557, Phase XI, Sector 65, Mohali, SAS Nagar.

…..Respondent.

ARGUED BY:

Sh. Karan Gaba, Advocate for the revision petitioner.

Sh. Om Parkash Dabla, Advocate for the respondent.

Sh. Ashish Mohan Gupta, Managing Director, M/s Hind Motors (India) Ltd., House No.161, Sector 27A, Chandigarh.

…..Petitioner.

VERSUS

Smt. Bhupinder Kaur w/o Sh. Gamdur Singh, resident of H.No.2557, Phase XI, Sector 65, Mohali, SAS Nagar.

…..Respondent.

ARGUED BY:

Sh. Karan Gaba, Advocate for the revision petitioner.

Sh. Om Parkash Dabla, Advocate for the respondent.

Sh. Ashish Mohan Gupta, Managing Director, M/s Hind Motors (India) Ltd., House No.161, Sector 27A, Chandigarh.

…..Petitioner.

VERSUS

Swatanter Sehgal, House No.230, Indian Express Society, Sector 48A, Chandigarh.

…..Respondent.

ARGUED BY:

Sh. Karan Gaba, Advocate for the revision petitioner.

Sh. Om Parkash Dabla, Advocate for the respondent.

Sh. Ashish Mohan Gupta, Managing Director, M/s Hind Motors (India) Ltd., House No.161, Sector 27A, Chandigarh.

…..Petitioner.

VERSUS

Sh. Om Parkash Dabla son of Late Sh. Hari Singh, resident of House No.238, Sector 20A, Chandigarh.

…..Respondent.

BEFORE:   JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                MR. RAJESH K. ARYA, MEMBER.

ARGUED BY:

Sh. Karan Gaba, Advocate for the revision petitioner.

Sh. Om Parkash Dabla, respondent in person.

PER RAJESH  K. ARYA, MEMBER 

                   Vide this order, we are disposing of above captioned revision petitions bearing Nos.18, 23 to 30 all of 2024 filed by Sh. Ashish Mohan Gupta, Managing Director of M/s Hind Motors (India) Ltd., Judgment Debtor No.2 against common order dated 11.03.2024 vide which, District Consumer Disputes Redressal Commission-I, U.T., Chandigarh (for short ‘District Commission’) has dismissed applications filed by him (in execution applications) under Section 151 CPC and Under Section 95 & 96 of the Insolvency and Bankruptcy Code (IBC) with costs of ₹5,000/- in each execution application.                  

2]                It is the contention of the revision petitioner in all these revision petitions that the District Commission has failed to appreciate that the provisions of IBC have been brought into force only to protect a party which is unable to pay its debts; that the provisions ibid have been introduced only to provide protection to such persons who are unable to pay their debts so that a resolution plan may be proposed; that the findings of the District Commission are not only against the statutory provision of IBC but also against the very intent of the Act; that the District Commission exceeded the provision of law and usurp to itself a jurisdiction to declare the party as a willful defaulter, which it has no power to do. Reliance has been placed on judgment dated 06.06.2022 of NCLAT in Company Appeal (AT) (Insolvency) No.724 of 2022 titled Dinesh Kumar Basia v. State Bank of India, wherein it has been held that an application under Section 95 is treated to be filed when it is filed in the office of the Registry at the filing counter and the submission made therein that application cannot be held to be filed unless it is numbered by the Registry was rejected. It has been contended that on filing application under Section 94 of the Code before the NCLT, the interim moratorium  comes into operation under the provisions of Section 96 of the IBC and the said interim moratorium commences on the date when such application has been filed and therefore, these revision petitions be accepted; impugned order be set aside and all the executions proceedings pending against the revision petition be stayed.

3]                On the other hand, the respondent argued that the District Commission has rightly dismissed the applications of the revision petitioner vide the impugned order by passing well reasoned order after appreciating both facts and law on the subject. He prayed that all these revision petitions be out rightly dismissed being not tenable in the eyes of law. 

4]                The only question of law, which falls for determination by this Commission in this bunch of revision petitions, is as to whether the execution proceedings on criminal side, can be undertaken against the Managing Director or Director, in view of filing of an application under Section 94 of IBC before the Hon’ble National Company Law Tribunal and in view of the provision of Section 96 of IBC and whether the impugned order against the judgment debtors is sustainable in the eyes of law? Our answer to this question is also in affirmative for the reasons to be recorded hereinafter.  Bare perusal of Section 94 of the IBC makes it very clear that an application under sub-section (1) thereof shall be submitted only in respect of debts which are not excluded debts.  The “excluded debts” has been defined under Section 79 (15) of the Code as under:-

“……79 (15) “excluded debt” means—

(a) liability to pay fine imposed by a court or tribunal;

(b) liability to pay damages for negligence, nuisance or breach of a statutory, contractual or other legal obligation;

(c) liability to pay maintenance to any person under any law for the time being in force;

(d) liability in relation to a student loan; and

(e) any other debt as may be prescribed…”

1.                 Thus, under Section 79 (15) (b) it is clearly defined that “excluded debt” means the liability to pay damages for negligence, nuisance or breach of a statutory, contractual or other legal obligation. In the present case, in the consumer complaints, the decrees were passed in the year 2016 and the revision petitioner lost his case at every stage of litigation up-to Hon’ble Punjab and Haryana High Court. It is important to mention here that even before the Hon’ble High Court, on 06.09.2023, the revision petitioner gave an undertaking that he would refund the entire decretal amount to the decree holders/complainants, meaning thereby, that he is very much in that capacity to pay the decretal amount to the decree holders. The order dated 06.09.2023 passed by Hon’ble High Court of Punjab and Haryana in LPA No.474 of 2023 reads thus:-

“This application has been preferred to stay the operation of the order dated 21.08.2023 (Annexure A-1) in vide of the order dated 03.05.2023 passed by this Court in appeal bearing LPA No.474 of 2023.

Learned counsel for the applicant/appellant submits that this Court by the order dated 03.05.2023, had directed respondent No.1-Forum to adjourn the execution application filed by respondent No.5 beyond the date fixed by this Court. The executing Court is insisting on a specific order of stay by this Court. He also submits that a similar appeal bearing LPA No.482 of 2023 is listed on 05.10.2023 and the interim order passed on 03.05.2023 therein has been directed to be continued till the next date of hearing. In the instant appeal, similar interim order has been passed on 03.05.2023. He also submits that the applicant/appellant wants to repay the entire amount which he owes to the private respondents and would satisfy the decree. He shall be filing an affidavit by the next date of hearing setting out the outstanding amount and the schedule of payment. The affidavit shall also mention the details of movable and immovable assets of the appellant and his family members.

Issue notice to the non-applicants/respondents.

Mr. Arun Gosain, Sr. Govt. Counsel and Ms. Swati Arora, Advocate accepts notice on behalf of respondents No.2 & 4. Mr. Mukand Gupta, Advocate has put in appearance on behalf of respondent No.5.

List alongwith LPA No.482-2023 on 05.10.2023.

Interim order dated 03.05.2023 shall continue till the next date of hearing.”

1.                 On 05.10.2023, the Hon’ble High Court observed that the appellant failed to comply with the undertaking and therefore, the interim order dated 03.05.2023 was vacated. Thus, it is very much clear from the factual position on record that on one hand the revision petitioner gave an undertaking to make the payment and satisfy the decree and on the other hand, he did not honour his undertaking, which prima-facie proves that he is not having any intention to make the payment and comply with the decretal order. It may be stated here that delays and difficulties in execution of decrees/awards erode public confidence and trust in the justice delivery system. Execution jurisdiction deserves special attention and expeditious disposal considering that the decree-holders have already succeeded in the litigation and hold a decree/award in their favour. In execution proceeding, the Executing Court has to ascertain the assets and income of the judgment-debtor to determine, whether the judgment-debtor has the means to satisfy the money decree. However, in the instant case, the revision petitioner himself gave an undertaking of having the capacity to  make the payment and satisfy the decree. Admittedly, he is the Managing Director of M/s Hind Motors (India) Ltd. Neither, he has refunded the balance amount nor has he paid the damages in the shape of compensation to the decree holders. In Satyawati v. Rajinder Singh, (2013) 9 SCC 491, the Hon’ble Supreme Court quoted the Privy Council‘s judgment of 1872 that the ‘difficulties of a litigant in India begin when he has obtained a decree’ and observed that the position has not improved and the decree-holders still face the same problems. The Hon’ble Supreme Court further observed that if there is an unreasonable delay in execution of a decree, the decree-holder would be unable to enjoy the fruits of his success and the entire effort of successful litigant would be in vain. Thus, in our considered view, the decreetal amount in each complaint has become “excluded debt” under Section 79 (15) (b) of the Code. Consequently, the provisions of Section 94 of the Code are not applicable to the cases, out of which the applications filed by the revision petitioner before the District Commission had arisen.
2.                 Now, the Hon’ble Supreme Court in the latest judgment in case titled Ajay Kumar Radheyshyam Goenka Vs. Tourism Finance Corporation of India Ltd., [Criminal Appeals No. 170-171-172  of 2023] [Criminal Appeal No. 171/2023] decided on 15.03.2023 has held that the directors of a Company are liable under the criminal proceedings and  thus, the proceedings cannot be stayed against them. Relevant part of the said order is reproduced hereunder:-

“……….This is despite the extinguishment of the criminal liability of the corporate debtor under sub-section (1). Still further, every person, who was associated with the corporate debtor in any manner, and, who was directly or indirectly involved in the commission of such offence, in terms of the report submitted and report filed by the investigating authority, will continue to be liable to be prosecuted and punished for the offence committed by the corporate debtor.

319. Thus, the combined reading of the various limbs of sub-section (1) would show that while, on the one hand, the corporate debtor is freed from the liability for any offence committed before the commencement of the CIRP, the statutory immunity from the consequences of the commission of the offence by the corporate debtor is not available and the criminal liability will continue to haunt the persons, who were in charge of the assets of the corporate debtor, or who were responsible for the conduct of its business or those who were associated with the corporate debtor in any manner, and who were directly or indirectly involved in the commission of the offence, and they will continue to be liable….”

8]                In the case in hand, the provision of Section 27 of Consumer Protection Act 1986 of criminal nature and is punishable with imprisonment which should not be less than one month but not more than three years or with a fine which shall not be less than Rs.2,000/- but which may extend to Rs.10,000/-. Similar provision with enhanced punishment provided under the new Consumer Protection Act 2019, under Section 72 thereof. It may be stated here that the Consumer Fora are empowered with the powers of Judicial Magistrate First Class to try the offenses under Section 27 of CPA 1986 and 72 of CPA 2019, as the case may be, as a criminal complaint under the provisions of Section 200 Cr.P.C. It may also be stated here that in case titled ‘ADARSH JHUNJHUNJWALA VERSUS STATE BANK OF INDIA & ANR’, WPO 1548 of 2021, decided by Hon’ble High Court of Calcutta, on 24th December 2021, has held that “….Recovery proceedings or proceedings under Section 96 of the IBC, 2016, or the borrower’s success therein, would not absolve the borrower who has been found to be a willful defaulter. The willful defaulter proceedings only aim at dissemination of information…” In above of above, it is held that the act and conduct of the revision petitioner/judgment debtor(s) could not be said to be bonafide. They defied the orders of this Commission and also that of Superior Courts and they are having no intention to satisfy the decree and as such, the proceedings pending against the revision petitioner, as a willful defaulter before the District Commission below, cannot be stayed and he is liable for the same.

9]                Consequently, it is held that no case is made out to stay the execution proceedings against the judgment debtors/revision petitioner before the District Commission. We are of the opinion that all these revision petitions bearing No.18 of 2024, 23 of 2024, 24 of 2024, 25 of 2024, 26 of 2024, 27 of 2024, 28 of 2024, 29 of 2024 and 30 of 2024, are not maintainable and the same have been filed with malafide intention and ulterior motive to delay execution proceedings and are, therefore, dismissed with no order as to cost. 

10]            Accordingly, pending Miscellaneous Application, if any, in these revision petitions also stand dismissed.

11]              A copy of this order be placed in connected revision petitions bearing No.23 to 30 all of 2024.

12]              Certified copies of this order be sent to the parties free of charge.

13]              Files be consigned to Record Room after completion.

Pronounced.

23.04.2024

Sd/-

[RAJ SHEKHAR ATTRI]

PRESIDENT

Sd/-

(RAJESH  K. ARYA)

MEMBER

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