LAWS(SC)-2025-3-12

SARANGA ANILKUMAR AGGARWAL Vs. BHAVESH DHIRAJLAL SHETH

Decided On March 04, 2025
Saranga Anilkumar Aggarwal Appellant
V/S
Bhavesh Dhirajlal Sheth Respondents

JUDGEMENT

(1.) The present appeal has been filed against the final judgment and order passed by the Nationa [NCDRC] Consumer Disputes Redressal Commission1, wherein multiple penalties (27 in total) were imposed on the appellant for failing to deliver possession of residential units to homebuyers as per the agreed timeline. The appellant seeks a stay on the penalty proceedings before the NCDRC, contending that an application under Sec. 95 of the Insolvency and Bankruptcy Code, 2016 [IBC] has been filed against them, triggering an interim moratorium under Sec. 96 of the IBC.

(2.) This Court is called upon to adjudicate whether execution proceedings under Sec. 27 of the Consumer Protection Act, 1986 [CP Act], can also be stayed during an interim moratorium under Sec. 96 of the IBC. The present matter arises from an application filed by the appellant, who is the proprietor of proforma respondent no. 3 - East & West Builders (RNA Corp. Group Co.), in an execution application filed by respondent nos. 1 and 2 before the NCDRC, challenging the execution of multiple penalty orders imposed by the NCDRC during the pendency of insolvency proceedings against the Corporation. The appellant contends that the imposition and execution of these penalties should be stayed due to the pendency of insolvency proceedings initiated under Sec. 95 of the IBC.

(3.) The appellant is engaged in real estate development and has several pending consumer complaints before the NCDRC filed by homebuyers alleging delay in possession, deficiency in service, and breach of contractual obligations. The NCDRC, in its final judgment dtd. 10/8/2018 in CC/1362/2017 along with other connected matters, allowed the complaints and directed the appellant to complete construction, obtain the requisite occupancy certificate, and hand over possession and imposed 27 penalties on the appellant for deficiency in service by failing to deliver possession within a reasonable time. The respondent no.1 and 2, as decree holders, subsequently filed execution applications seeking execution of the abovementioned order of the NCDRC as the appellant failed to comply with the directions of the NCDRC.