Geetanjali Khosla & Anr.

Vs

M/s Entertainment City Ltd. & Ors.

22.12.2023                                                              EXE/26/22

1. The Complainant have filed an application under section 27 of Consumer Protection Act (wherein after referred to as Act) with the averments that the case titled as Ms. Geetanjali Khosla and Ors. Vs Entertainment City Ltd. was pending disposal in this Commission and said compliant was referred to Delhi Government Mediation and Conciliation Center where the complaint was settled, which is clear from the settlement dated 16.05.2017. The parties have agreed to bound by the settlement so the complaint was withdrawn on the basis of settlement on 10.07.2017. The OPs have not complied with the settlement. A sum of Rs.4638144/- besides the interest on various monthly installment of Rs.165648 from the date of the filing with interest @12% p.a. is due. Hence, this application.
2. The OPs have filed an application to adjourn the present application sine die with the averments that OP No.1 is joint venture of Unitech Holdings Ltd., a wholly owned subsidy of Unitech Ltd. International amusement Ltd. with UHL holding of 41.95% of the equity and IAL holding of 53.15% of equity. There are numerous litigations against Unitech Ltd. as well as against its entities. Hon’ble Apex Court directed the union Government to appoint independent management for Unitech Ltd. upon which Government proposed the Constitution of new Board of Directors which was approved by Hon’ble Apex Court in Civil appeal No.10856/2016 titled as Bhupender Singh vs Unitech Ltd. vide order dated 20.01.2020. The erstwhile management of Unitech Ltd. was superseded. The Ministry of Corporate Affairs, Government of India appointed independent Board of Directors vide orders dated 21.01.2020, 22.01.2020 and 03.02.2020. The matters pertaining to affairs of Unitech Ltd. and its enties have been under consideration of Hon’ble Apex Court. The Hon’ble Apex Court vide order dated 20.01.2020 has directed that there shall be moratorium in cases of Unitech Group. The Hon’ble Apex Court vide order dated 24.03.2021 held that new board shall be responsible for the management and control of unitech group. The order dated 20.01.2020 is applicable to all group entities of Unitech Ltd. The management is authorized to appoint and remove Directors/Trustees of subsidiaries and trust etc. The Hon’’ble Apex Court vide order dated 24.03.2021 has extended the benefit of moratorium on all the affiliates, trust, subsidiary of Unitech Ltd. including the OP. The Commission may not proceed with the proceedings till further orders from the Hon’ble Apex Court. Hence, this application.
3. The complainants have filed the reply to the fact that the perusal of the orders passed by Hon’ble Apex Court will establish that OP-1 is not bound by the farthest stretch of imagination either by Unitech Ltd. or its group entities. OP-1 is not a joint venture with Unitech Ltd. so OP-1 has nothing to do with Unitech Ltd. The application is without any merits.
4. The OP-1 has also filed an application under order 1 Rule 10 CPC for deletion of names of OP-2 to 6 and 8-9 from the array of parties on the grounds that OP-1 is joint venture of Unitech Holdings Ltd., a wholly owned subsidiary of Unitech Ltd., and International amusement Ltd. with UHL holding of 41.95% of equity and IAL Holding of 53.15% equity. OP-2-4 and 9 are independent directors whereas OP-5 & 6 are directors nominated by Union of India and appointed by Hon’ble Apex Court vide order dated 20.01.2020 in Civil Appeal No.10856/2016 titled as Bhupender Singh vs Unitech Ltd. The OP-5 and 6 have been granted immunity against such proceedings.
5. There is moratorium in cases of OP-1 and its entities. The order dated 20.01.2020 passed by Hon’ble Apex Court says that a moratorium has been issued on all proceedings against Unitech Group. The order dated 24.03.2021 extended the benefit of moratorium on all the affiliates, trustees, subsidiaries of Unitech Ltd. including the OP, so the order dated 20.01.2020 is equally applicable to OP-1.
6. The OP-2 to 6 & 9 have never entered into any contact personally with the complainants. The transaction was only between complainants and OP-1. The OP-1 being a private limited company is a separate legal entity distinct from shareholders and Directors. The OP-2 to 6 and 9 cannot be held liable on the premise that they are Directors especially in the absence of any specific allegation against them. Hence, this application.
7. The complainants have filed reply to the effect that order passed by Hon’ble Apex Courts relates to Unitech Ltd. so it does not have any relevance to OP-1. OP-1 is not the joint venture with any other entity. No immunity has been granted to the Directors of OP-1. The application is without any merits.
8. Ld. Counsel for the applicants  OP (s) submitted that OP-1 is a joint venture of Unitech Holdings Ltd. which is a wholly owned subsidiary of Unitech Ltd. so the orders passed by Hon’ble Apex Court in Civil appeal number 10856/2016 titled as Bhupender Singh Vs Unitech Ltd. on 20.01.2020, 24.03.2021 are binding upon OP-1 as such the present application should not be continued and adjourned Sine-Die. He further submitted that complainants have arrayed the Directors including the directors nominated by Union of India in the present Board as opposite parties. He further submitted that the directors nominated by Union of India and appointed by Hon’ble Apex Court in the Board of Directors have immunity in respect of numerous litigations pending against Unitech Ltd. and its affiliates, trustees, etc. He further submitted that complainants have failed to explain how the Directors have been impleaded opposite parties in the present application when they were not impleaded in the complaint filed by the complainants.
9. Ld. Counsel for the complainants submitted that moratorium will not cover a person who is not a corporate debtor. He further submitted that application under section 27 of the Act can be moved against the persons who were incharge and responsible for the conduct of the business of the company. He further submitted that proceedings under section 27 of the Act are criminal in nature and proceedings under section 27 of Act cannot be stayed as provisions under section 27 are in addition to the mode of recovery contemplated under section 25 of the Act. He further submitted that Directors have been impleaded as they were incharge and responsible for the conduct of business of OP. He has placed reliance upon Prudential Capital Market Ltd. vs Dipankar Guha, 2007 (135) comp. case 379, Delhi and P Mohan Raj vs M/s Shah Brothers Ispat Pvt. Ltd. decided on 01.03.2021 by Hon’ble Apex Court and Execution Application no.247/20 of CC No.3812/17 titled as Gautam Roy vs Orris Infrastructure Pvt. Ltd. and Ors. decided on 16.08.2022 by Hon’ble National Consumer Dispute Redressal Commission.
10. We have heard Ld. Counsel for the parties and perused the entire material on record.
11. The opposite parties have filed an application for deletion of the names of OP-2 to 6 and 8-9.
12. The complainant has arrayed directors of OP-1 as OP-2 to 13 in the application under section 27 of the Act.
13. There is no dispute in the preposition of law that Corporate debtor is protected by the moratorium whereas signatories and directors cannot escape from their penal liabilities under section 138 of the NI Act. Reliance is placed upon Sandeep Gupta vs Shriram Steel Traders ltd. 2023 SCC online Delhi 2786, Ajay Kumar Radhey Shyam Goenka vs Tourism Finance Corporation Ltd. 2023 SCC online Supreme Court 266 and P Mohan Raj vs M/s Shah Brothers Ispat Pvt. Ltd., Supra.
14. The complainants have filed the complaint bearing CC No.184/17 titled as Geetanjali Khosla and Anr. Vs M/s Entertainment City Ltd. The settlement has taken place in the said complaint before Delhi Government Mediation and Conciliation Center on 16.05.2017 and thereafter complaint was  withdrawn by the complainant from this Commission as apparent from order dated 10.07.2017.
15. The complainants have only arrayed OP-1 as a party in the complaint case originally filed in this Commission. He did not implead any of the Directors as opposite party in the complaint. The complainant cannot now implead Directors as opposite parties in the application under section 27 of the Act once they were not the parties in the original complaint. The actual parties in the complaint should be the parties in the application under section 27 of the Act. There is no explanation from the complainants why they have impleaded directors as opposite parties no.2 to 13 in the application under consideration when they were not the parties in the original complaint. The complainants at their own whims cannot implead any one as a party when no order was passed against that party. To my mind, the complainants should not have arrayed directors as OP-2 to 13 when they were not the parties in the original complaint. Hence, the application under section 27 of Act against OP-2 to 13 stands dismissed. The application filed by the OP-1 for the deletion of the name of OP-2 to 6 and 8-9 stand disposed off in terms of the above said discussion.
16. The Ld. Counsel for the complainants  have placed reliance on Prudential Capital Market Ltd. vs Dipankar Guha, Supra to stress upon the point that the proceedings under section 27 of the Act are criminal in nature so they cannot be stayed and moreover OP-1 is not the affiliate of Unitech Ltd. so the orders of Hon’ble Apex Court are not applicable to OP-1.
17. With due respect, the Ld. Counsel for the complainants cannot draw support from said case law. The proceedings under section 27 of the Act can be initiated against the managing Directors/Directors of the judgments debtor company as held by Hon’ble Apex Court in Lalit Kumar Jain vs Union of India and anr. 2021 SCC online 396. In P Mohan Raj vs M/s Shah Brothers Ispat Pvt. Ltd., Supra, it was held by the Hon’ble Apex Court that moratorium will cover the corporate debtor and proceedings cannot continue against corporate debtor.
18. In Sandeep Gupta vs Shirram Steel Traders Ltd. Supra, it was held by the lordship that only the corporate debtor is protected by the moratorium while the signatories/Directors cannot escape from their penal liability under section 138 of NI Act by filing personal insolvency proceedings.
19. In view of the said case law discussed above, the case law relied upon by Ld. Counsel of the complainants is not applicable to the present application.
20. The OP-1 is an affiliate of Unitech Group as held by their lordship in Company Appeal (AT) insolvency no.431/2022 titled as M/s Entertainment City Ltd. through its AR vs Simran Kaur and ors. decided on 25.07.2022 by Hon’ble NCLAT.
21. The OP-1 is an affiliate of Unitech Group. The orders dated 20.01.2022 and 24.03.2022 passed by Hon’ble Apex Court in Bhupender Singh vs Unitech Ltd., Supra is fully applicable to OP-1. This is also held by their lordship in ARB.p.935/2022 & I.A. 12821/2022 titled as Ajay Kumar Vali and Anr. Vs Entertainment City Ltd. decided on 18.08.2022 by Hon’ble High Court of Delhi.
22. The OP-1 is entitled for the benefit of the orders dated 20.01.2020 and 24.03.2021 passed by Hon’ble Apex Court. Reliance is placed upon Company Appeal (AT) insolvency no.431/2022 titled as M/s Entertainment City Ltd. through its AR vs Simran Kaur and ors. Supra.
23. The OP-1 is an affiliate of Unitech Group, so the orders passed by Hon’ble Apex Court on 20.01.2020 and 24.03.2021 are fully applicable to OP-1.
24. The application under section 27 against OP-1 is adjourned Sine Die till the currency of moratorium as imposed by the Hon’ble Apex Court dated 20.01.2020 and 24.03.2021.

File be consigned to record room.