{"id":381124,"date":"2026-04-15T18:30:24","date_gmt":"2026-04-15T13:00:24","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=381124"},"modified":"2026-04-15T18:21:22","modified_gmt":"2026-04-15T12:51:22","slug":"ncdrc-ansal-hitech-township-director-liability-section-72-consumer-protection-act","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/04\/15\/ncdrc-ansal-hitech-township-director-liability-section-72-consumer-protection-act\/","title":{"rendered":"NCDRC Holds Ansal Hi-Tech Township Directors Liable for Wilful Non-Compliance of Consumer Court Order"},"content":{"rendered":"
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National Consumer Disputes Redressal Commission<\/span>: 70 Execution Applications, all filed against the same Judgment Debtor M\/s Ansal Hi-Tech Township Limited (“AHTTL”) were heard together by the bench comprising of Dr. Inder Jit Singh, (Presiding Member)<\/span> and Dr. Sudhir Kumar Jain, J. (Member)<\/span>, where the bench of National Consumer Disputes Redressal Commission (“NCDRC”) discussed the issue related to penalty for non-compliance of order of the Consumer Commission by Directors and Key Managerial Personnel (“KMP”) under Section 71<\/a> and 72<\/a>, Consumer Protection Act, 2019<\/a> (“the Act”), and held that Directors\/KMPs of Ansal Properties and Infrastructure Limited (“APIL”\/parent company) cannot be personally liable for satisfying the decree under Section 71, however the bench lifted the corporate veil between AHTTL and APIL and exposes APIL’s current directors\/KMPs to penal action under Section 72, subject to their individual liability being established.<\/p>\n

Factual Background<\/h3>\n

In the year 2000<\/span>, several complaints were filed against AHTTL for a project called “Sushant Megapolis” in Bulandshahr, Uttar Pradesh, where AHTTL was directed to refund full amount in 3 months. However, AHTTL paid nothing and hence the 70 execution applications were filed.<\/p>\n

In October 2021<\/span>, attachment warrant issued by SDM Chanakya Puri, Delhi, against AHTTL’s movable and immovable properties<\/p>\n

In 2024<\/span>, show cause notices were issued to, 8 directors\/KMPs of AHTTL, 8 promoters\/directors of APIL and all 16 directed to appear in person, after last opportunity was defaulted to pay instalments.<\/p>\n

In 2025<\/span>, Supreme Court directed conclusion of proceedings within 4 months for all directors wilful non-compliance. Decree holders were asked to argue how APIL’s directors can be held liable through lifting of corporate veil. Affidavit filed by AHTTL was found incomplete and misleading (e.g. claimed 1,660 acres land; admitted only ~130 acres actually owned). AHTTL was barred from dealing with any assets or withdrawing from bank accounts without Commission’s permission.<\/p>\n

In January, 2026:<\/span> NCLAT passed an order holding APIL’s moratorium restricted to certain projects only; and the Sushant Megapolis project was not under moratorium.<\/p>\n

Primary questions before the Commission<\/h3>\n

1. Whether the Supreme Court’s judgment in Ansal Crown Heights Flat Buyers Assn. v. Ansal Crown Infrabuild (P) Ltd<\/span>. (2)<\/span>, 2026 SCC OnLine SC 51<\/a>, where it was held that ‘once a company is under moratorium, its assets cannot be attached or sold to satisfy a decree. Further, directors\/KMPs who were not named in the original order cannot be pursued for execution in the company’s place<\/span>’, protect AHTTL’s directors\/KMPs from coercive action under Sections 71<\/a> and 72<\/a> of the Consumer Protection Act, 2019<\/a> — especially when AHTTL is not<\/span> under moratorium?<\/p>\n

2. Whether the corporate veil be lifted to make APIL (parent company) and\/or its directors personally liable for satisfying AHTTL’s decree?<\/p>\n

Analysis<\/h3>\n

(1) Personal Financial Liability under Sections 71<\/a> and Penal Liability 72<\/a> of the Consumer Protection Act, 2019<\/a>:<\/p>\n

On the question of personal financial liability, the Commission has clarified that directors and KMP who were not parties to the original complaint and against whom no specific directions were issued cannot be held personally liable for satisfaction of a decree passed against the company. Consequently, their personal assets cannot be attached for this purpose, and proceedings under Section 71 of the Act cannot be initiated against them. This position is in consonance with the Supreme Court’s judgment Ansal Crown Heights (2)<\/span> case.<\/p>\n

However, the Commission has drawn a clear distinction when it comes to penal liability directors and KMP remain fully liable to be proceeded against under Section 72 of the Act on account of the company’s failure to satisfy the decree or comply with the Commission’s orders. Importantly, such proceedings can be initiated and continued irrespective of whether the company is under moratorium or not, as held by the Supreme Court in Ansal Crown Heights Flat Buyers Association v. Ansal Crown Infrabuild (P) Ltd.(1)<\/span>, (2024) 5 SCC 745<\/a>.<\/p>\n

(2) Extent of liability of the parent company (APIL)<\/p>\n

The Commission on the issue of extent of liability of parent company observed, that where directors or KMPs were not parties to the original consumer complaint and no directions were issued against them in the decree, they cannot be personally held liable for its satisfaction. This principle applies equally to directors\/KMP of a parent company APIL of the judgment debtor subsidiary AHTTL, even if the corporate veil between parent and subsidiary is lifted, the parent company’s directors\/KMP cannot be personally held liable, their personal assets cannot be attached, and no action lies against them under Section 71<\/a> of the Consumer Protection Act, 2019<\/a>.<\/p>\n

(3) Lifting\/Piercing of Corporate Veil between AHTTL (JD Company) and APIL (Parent Company)<\/p>\n

The question before the Commission was whether the Decree Holders (“DHs”) have established sufficient grounds to lift\/pierce the corporate veil between the judgment debtor subsidiary (AHTTL) and its parent company (APIL), so as to uphold liability of APIL for satisfaction of decrees and compliance with orders\/directions passed against AHTTL by the Commission.<\/p>\n

The Commission laid emphasis on State of U.P. v. Renusagar Power Co<\/span>., (1988) 4 SCC 59<\/a>, and observed that “lifting of veil is permissible, its frontiers are unlimited, it must, however, depend primarily on the realities of the situation<\/span>.”<\/p>\n

The Commission observed that a company is a separate legal entity under the Companies Act, 2013<\/a> and a parent company is ordinarily not liable for the acts of its subsidiary, and execution courts cannot go beyond a decree to bind parties not originally named in it. However, the Commission observed that doctrine of lifting\/piercing the corporate veil is a key exception. The Commission opined that liability of a parent company and its directors\/key managerial personnel for a subsidiary’s acts can arise only in exceptional cases involving fraud, statutory non-compliance, misuse of corporate structure to defraud consumers.<\/p>\n

After careful consideration of all the facts and circumstances of the case, evidence \/ documents placed before the Commission,<\/span> it was held that the parent company (APIL) is liable for the acts of omission and Commission of its subsidiary company ( Judgment Debtor Company AHTTL) and for satisfaction of decree(s) against AHTTL and other orders of this Commission passed from time to time subsequent to the decree(s) in various EAs covered under this order. This liability of APIL and its current management to satisfy the decree of its subsidiary company AHTTL is joint and several, alongwith the liability of JD Company ( AHTTL) and its management<\/span>.<\/p>\n

Decision<\/h3>\n