Ansal Crown Heights Flat Buyers Association (Regd.) vs M/s Ansal Crown Infrabuild Pvt. Ltd. & Ors.

Held: Decree cannot, by process of execution, be employed to shift or enlarge liability so as to bind persons who were neither parties to the decree nor otherwise legally liable thereunder – Where the judgment debtor is a company, the liability of its shareholders or joint venture partners remains confined to the extent of their shareholding or to such guarantees or undertakings as may have been expressly furnished by them – On facts, the appellant-association of flat buyers neither pleaded nor established that the respondents 2 to 9-directors/promoters had furnished any guarantee or surety in respect of the investment made in the project, nor has any material been placed on record to attract the application of s.14(3) – Once a moratorium has been declared against the judgment debtor company-ACIPL, the modes of execution contemplated u/s.71 including attachment and sale of movable or immovable property, attachment of bank accounts, or withdrawal of decretal amounts from the accounts of the judgment debtor, stand interdicted – Execution proceedings cannot, thus, be permitted to continue indirectly against the respondents 2 to 9, who are neither judgment debtors nor guarantors, and against whom no independent liability under the order allowing the complaints has been established – CP Act envisages a complete adjudicatory process founded on service of notice, pleadings, opportunity to contest, leading of evidence, and recorded findings of fact and law – These are not mere procedural formalities but substantive safeguards that precede the fastening of liability – No such adjudicatory exercise was undertaken qua the respondents 2 to 9 – No pleadings attributing any personal role to them, no evidence led to establish individual culpability, and no findings returned fixing personal liability – In the absence of these foundational elements, execution proceedings cannot be utilised as a surrogate forum to impose liability where none has been adjudicated – Invocation of the doctrine of piercing the corporate veil wholly unwarranted – Lifting of the corporate veil is an exceptional measure, to be resorted to only upon a clear finding that the corporate personality was abused for fraudulent or dishonest purposes – Such a finding must be preceded by specific pleadings and a determination on merits – No such allegation of fraud or misuse of the corporate form was either pleaded or established before the adjudicatory forum – In the absence of a prior and reasoned determination justifying disregard of the corporate personality, the directors/promoters cannot be exposed to personal liability through execution – NCDRC committed no error of law or jurisdiction in declining to execute the order against persons who were admittedly not parties to the complaints – Order binds only ACIPL – Appellant did not challenge the order of the NCDRC declining to issue notice to the respondents 2 to 9 and directing it to file amended memo of party with ACIPL as the sole respondent, and cannot now enlarge the order through execution. [Paras 13-15, 17, 18, 20-23]