In Appeal Execution No. 71 of 2024 we have heard learned counsel for the appellant Mr. Akshay Sapra, learned counsel for respondent no.1 Mr. Bhupender Pareek, and learned counsel for respondent no.2 Mr. Rishi K. Awasthi.  In the other Appeal (Appeal Execution No. 72 of 2024) we have heard learned counsel for the appellant, Mr. Awasthi, learned counsel for respondent no.2 but no one has appeared on behalf of respondent no.1 in the said appeal.

Learned counsel for the appellant has pointed out that before the SCDRC Rajasthan (hereinafter referred to as the State Commission), where the impugned orders were passed, the counsel for respondent no.1 was available, namely, Mr. Anirudh Mathur to whom a mail was sent informing him about the pendency of the case and the orders passed therein, and then he was also informed about the orders passed by this Commission that were on record before the State Commission in the proceedings pending there.  Thus, it is evident that inspite of having information about the pendency of the case, neither the respondent no.1 nor his counsel have appeared in Appeal Execution No. 72 of 2024.

We have therefore heard the matter keeping in view the legal issues that were raised and have been noted in the order dated 14.06.2024 when an interim order was passed that is extracted hereunder:  

“Heard learned counsel, who submits that the order impugned passed herein is primarily an improper exercise of jurisdiction by entertaining a miscellaneous application in a matter which had already been disposed off. The aforesaid argument has to be decided in the background that the application seems to have been captioned as a contempt application and then while discussing the impugned order, reference has been made to Section 27 of the Consumer Protection Act, 1986 as well as to Section 72 of the Consumer Protection Act, 2019.

However, on facts learned counsel has emphasised that in so far as the present appellant is concerned, he had resigned way back on 18.11.2016 and therefore did not represent the Company in any capacity whatever when the complaint was filed in 2019. The contention is that by making an averment in the application giving rise to the impugned order, describing the appellant to be working as the Head of Marketing and Sales Corporation, should be proceeded against was a false statement on the basis whereof warrants were erroneously issued against him on 05.10.2021.

An Application for cancellation of the warrants coupled with a request for the deletion of the name of the applicant was made, which has been rejected by the impugned order dated 23.05.2024, on the ground that the question of resignation could have been considered had the applicant appeared in person. Learned counsel submits that once all documents were on record then only on a prima facie consideration thereof the State Commission ought to have proceeded after appreciating the same, and hence the impugned order according to the learned counsel is not in accordance with law as it ignores vital facts on record.

He also relies on the order passed by this Commission in the case of Rajesh J. Aeren Vs. Mukhtaiar Singh Bal & Anr., First Appeal No. 2403 of 2017, dated 16.01.2018 and then the larger Bench order passed in the case of Rajnish Kumar Rohatgi & Anr. Vs. M/s. Unitech Limited & Anr., EA/80/2016 in CC/14/2015 dated 08.01.2019, to contend that the liability can in no way be located so as to call upon the applicant for its compliance. There is neither any direct or vicarious liability in law against the appellant for being executed pursuant to the decree of the Commission.

Prima facie the matter requires consideration as all statutory penal measures do not eclipse fundamental rights of liberty. The enforcement of law has to be procedurally applied only against a person who is liable, according to the authorities relied on if the offence is made out on the date of the order. The appellant claims to have resigned way back on 18.11.2016, but the State Commission has issued warrants without dealing with this aspect by observing that it could have considered it only if the appellant had appeared personally.

On the other hand the plight of the consumer, who in spite of a decree is contesting litigation without the fruits of the decree.

Issue notice calling upon the respondents to answer this compilation along with their objections, if any, for consideration of the grant of an interim order or passing of any other orders or otherwise by the date fixed.  It is stated that the next  date fixed before the State Commission is 10.07.2024.

Let the matter come up on 26.06.2024. Till the next date fixed no coercive action shall be taken against the appellant.

The office shall issue dasti notices as well as dispatch notices according to the normal mode and in the event email addresses of the respondents are available, the notices shall also be served through the same. Learned counsel is permitted to obtain a certified copy of this order and place it on record of the proceedings before the State Commission.”

The matter was again heard on 26.06.2024 when the following order was passed:

“Heard learned counsel for both the parties.

Mr. Bhupender Pareek, learned counsel for the first respondent, has joined online. 

Mr. Awasthi, learned counsel, has appeared for the second respondent and placed before the Bench a compilation of documents.  The compilation may be placed before the Registry which shall give a diary number to the same.  Let a copy of the said compilation be also served on the learned counsel for the first respondent. 

Mr. Pareek prays for four weeks’ time to file a response.  Let a copy of the said reply be served on the learned counsel for the appellant as well as the counsel for the second respondent.  They may also file their response within four weeks thereafter.

The matter may be listed after the expiry of the aforesaid period on 30.09.2024.

Having heard learned counsel for the parties and keeping in view the issues that were indicated in the order dated 14.06.2024, prima facie the contention raised on behalf of the appellant appears to be correct and therefore in view of the documents, which have also been placed before the Bench by the learned counsel for the second respondent, further proceedings arising out of the impugned order before SCDRC Rajasthan insofar as against appellant Mr. O.P. Srivastava is concerned shall remain stayed.

This order is passed without prejudice to the rights of the first respondent to get the order of the State Commission executed or approach the Apex Court for any clarification.”

The case was listed on 30.09.2024 when the following order was passed:

“Heard learned Senior Counsel Mr. Kohli, for the Applicants.

The office has put up a note indicating as to the category within which the present matter can be registered.

From a perusal of the application which has given rise to the Impugned Order it appears to be an Application under Section 72 of the Act. The Appeal therefore would lie under Section 73 and accordingly this Appeal is provisionally admitted as per Section 73 of the Consumer Protection Act, 2019 and shall be accordingly given a regular number. The connected Diary No. 30808 / NCDRC / 2024 – FA shall also be registered accordingly as it is a similar dispute.

It is evident from the Orders passed previously that Mr. Bhupender Pareek had appeared for Respondent No. – 1 but no one is present today for the said Respondent.

Mr. Avinash Ankit holding brief of Mr. Rishi K. Awasthi who has filed his Vakalatnama is present for the Respondent No.- 2 and he submits that he also takes notice in the connected matter and shall be filing an appropriate affidavit indicating the stand of Respondent No.-2. Let the said Affidavit be filed within two weeks.

A copy of this Order shall be placed on the execution proceedings before the State Commission in order to enable it to take notice of these proceedings and also for the information of Respondent No.-1 who inspite of having put in appearance through Counsel has not appeared today.

Let dasti summons be sent to Respondent No.-1 in both the matters.

List on 05.11.2024.

Interim Order granted earlier shall continue.”

It is in these circumstances that the Executing Court before the State Commission and the parties thereto were well informed of these appeal proceedings pending before this Commission. 

Learned counsel for the appellant has advanced the same submissions and has relied on the documents on record to contend that the ROC documents leave no room for doubt that the present appellant had already resigned from the Company way back on 18.11.2016.  The complaints which have been filed were instituted in 2019 long thereafter and even otherwise the appellant was not a party to the complaints.  He therefore submits that neither any liability arises in law against the appellant nor is the appellant in any way bound by the decree in favour of the respondents complainants in both the appeals.  Learned counsel for the appellant has then invited the attention of the Bench to the order passed by this Commission in First Appeal No. 2403 of 2017 (Rajesh J. Aeren Vs. Mukhtiar Singh Bal & Anr.) decided on 16.01.2018 passed on almost identical facts.  The appeal was allowed holding that a Director who had already resigned even before the complaint was instituted cannot be saddled with any liability so as to ensure compliance of any orders passed against the Company.  The order is extracted hereunder:

“No one is present for the Complainant/Respondent No.1 despite service, though there is appearance on behalf of Respondent No.2 and an Official Liquidator appointed for Respondent No.2 company which has gone into liquidation.

2.      Vide order dated 28.11.2014 passed in a consumer complaint against the company, namely, Aerens Entertainment Zone Ltd., and its Managing Director and its Manager, the State Commission directed refund of a sum of Rs.1355066/- with interest. The aforesaid direction was issued to the company as well as its Managing Director. The revision petition to this Commission having been dismissed, the aforesaid order became final.

3.      The State Commission has in the proceedings instituted under Section 27 of the C.P. Act, issued a notice purporting to be under Section 251 of Code of Criminal Procedure to the appellant Sh. Rajesh Jainanarain Aeren. Vide impugned order dated 22.11.2017, the State Commission has directed the personal appearance of the petitioner Rajesh Jainanarain Aeren.

4.      The case of the appellant is that he had ceased to be a Director of the company, namely, Aerens Entertainment Zone Ltd., even before the consumer complaint was instituted and, therefore, show-cause notice under Section 251 of Code of Criminal Procedure could not have been issued to him.

5.      The appellant has placed on record a copy of Form 32 submitted to the Registrar of Companies. The aforesaid Form shows that he ceased to be a Director of the company w.e.f.20.6.2011. It is therefore, obvious that he was not the Director of the company even when the consumer complaint was instituted in the year 2012. Therefore, the order in the consumer complaint cannot be said to have been passed against the appellant nor could he have ensured compliance of the said order. Consequently, no notice under Section 251 of Code of Criminal Procedure could have been issued to him.

6.      For the reasons stated hereinabove, the impugned order is set aside and the proceedings against the appellant under Section 27 of the C.P. Act are hereby set aside. The appeal stands disposed of accordingly. Dasti.”

Mr. Pareek, learned counsel appearing for the respondent no.1 in Appeal Execution No. 71 of 2024, submits that the respondent complainant has been put to a substantial loss and at the stage of Execution the erstwhile Director has been summoned and it is in order to ensure his presence that the orders were passed by the State Commission for his production under a warrant.  He therefore submits that the orders dated 23.05.2024 do not suffer from any infirmity and the Executing Court should be allowed to proceed with the matter.

Mr. Awasthi, learned counsel appearing for respondent no.2 in both the cases, has filed a response supporting the resignation as also the other documents and has pointed out that the appellant stood discharged from all obligations after he ceased to be a Director of the Company in 2016 itself.  The statement made on behalf of respondent no.2 as contained in paragraphs-2 and 3 is extracted hereunder:

“2.      I state that as per the records maintained by the company-Sahara Prime City Limited, Sh. OP Srivastava had tendered his resignation in terms of Section 168 of the Companies Act, 2013 to the Board of Directors of the Company-Sahara Prime City Limited on 18.11.2016 and the same was duly accepted by the Board of Directors and accordingly a Form No. DIR-12 nearing SRN No.U65921UP1993PLC015170 was filed by the statutory department of the company on 25.11.2016 intimating the Registrar of Companies, Ministry of Corporate Affairs about the cessation of Sh. OP Srivastava from the Board of Directors of the Company-Sahara Prime City Limited with effect from-25.11.2016.  A copy of the resignation letter dated 18.11.2016 and DIR Form No. 12 dated 25.11.2016 are annexed herewith as Annexure A1(Colly).

3.       I state that pursuant to intimation dated 18.11.2016 by Sh. OP Srivastava and subsequent submission of his resignation with Registrar of Companies on 25.11.2016, he has ceased from the Directorship of the Company-Sahara Prime City Limited and he is in no manner responsible to take any decision nor pass any resolution with respect to the affairs of the company since the said date.  I further state that he has been discharged from participating in the affairs of the Company-Sahara Prime City Limited w.e.f. 18.11.2016 by the Board of Directors of the Company”

Having heard learned counsel for the parties and having considered the submissions raised, there is no dispute about the fact of the appellant having resigned in 2016, which fact has been affirmed by the second respondent through its affidavit and is confirmed by the ROC documents that are on record. 

In such circumstances, when the aforesaid fact remains unrebutted and undisputed, the next question is as to whether the liability could be at all executed against the appellant in the background that he was not even a party to the complaints.  To our mind, the appellant not being a party to the complaints and the complaints having been filed almost three years after he had ceased to be a Director cannot render him liable and the law as enunciated by this Commission in the case of Rajesh J. Aeren (Supra) would squarely apply with which we find ourselves in complete agreement with. 

Accordingly, the State Commission has committed an error by hauling up the appellant who cannot be held liable in the background as discussed hereinabove.  The proceedings against him in terms of Section 27 of the 1986 Act read with Section 72 of the 2019 Act cannot be executed and the warrants issued against the appellant was unjustified. 

The proceedings in respect of the properties of the opposite parties as well as the orders passed by the Apex Court from time to time resulting in the contempt petitions and other miscellaneous matters, have been placed on record but they do not require any consideration except that it shall be open to the Decree Holders to execute their decrees in accordance with law or approach the Appropriate Forum for any such relief. 

We accordingly allow the appeals, set aside the impugned orders dated 23.05.2024 as also the proceedings including the warrants issued against the appellant under Section 72 of the 2019 Act that has given rise to these proceedings.  The appellant shall therefore stand discharged from the execution proceedings in both the cases.