SUPREME COURT ISSUES SHOW-CAUSE NOTICE TO TWO MEMBERS OF THE NATIONAL CONSUMER FORUM AGAINST ISSUE OF NON-BAILABLE WARRANTS IN DEFIANCE OF APEX COURT’S INTERIM PROTECTION ORDER

A two-Judge Bench of the Supreme Court comprising of Justice Hima Kohli and Justice Ahsanuddin Amanullah passed a Judgment dated 15-04-2024 in the matter of M/s Ireo Grace Realtech Pvt. Ltd. Vs. Sanjay Gopinath, Interlocutory Application (I.A.) Nos. 81886/2024 & 84009/2024 in Civil Appeal No. 2764-2771/2022 and observed that despite a Court Order specifically directing that no coercive steps should be taken against the directors of the Appellant-Company, the Hon’ble National Consumer Dispute Redressal Commission (NCDRC) went ahead and issued Non-Bailable Warrants against them. Hence, as NCDRC disregarded the Supreme Court’s directions, the Apex Court issued a notice to both the Presiding Member and the Member of the NCDRC, thereby seeking a comprehensive explanation regarding their decision to issue the warrants in defiance of the Supreme Court’s protective order.

FACTS:

1) That the aforesaid Interlocutory Application was filed before the Apex Court by M/s Ireo Grace Realtech Pvt. Ltd. (Appellant-Company) against one, Sanjay Gopinath (Respondent), that challenged the decision of the NCDRC to issue a non-bailable warrant against the Directors of the Appellant-Company despite the protective Order passed by the Supreme Court on a previous date of hearing.

2) The NCDRC proceedings were initiated against a Developer i.e. the Appellant-Company by certain homebuyers who faced delays in receiving possession of flats in ‘The Corridor’ Housing Project, Gurugram in Consumer Complaint No. 773 of 2019. The NCDRC, vide Order dated 28.07.2022, awarded the homebuyers compensation payable by the Appellant-Company. Consequently, several homebuyers initiated execution proceedings in respect of the NCDRC Order dated 28.07.2022 in Execution Application No. 576 of 2022.

3) Aggrieved by the Order dated 28.07.2022 passed by NCDRC, the Appellant filed a Civil Appeal 2764-2771/2022 before the Supreme Court.

4) The Apex Court granted interim protection to the Appellant, vide, while issuing a notice. Additionally, the Interim Order dated 01.03.2024 passed by the Supreme Court prohibited the NCDRC from taking any coercive actions against the Appellant. The Apex Court specifically directed that no coercive measures should be taken against the Directors of the Appellant-Company in Execution Application No. 576 of 2022. However, despite this directive, the NCDRC, New Delhi proceeded to take action against the Directors of the Appellant-Company, vide Order dated 08.03.2024.

5) After noting the Apex Court’s Order, the NCDRC directed the Appellant-Company’s Counsel to file an affidavit of compliance regarding the execution of the decree in Consumer Complaint No. 773 of 2019 within two weeks. Subsequently, vide Order dated 02.04.2024, the NCDRC issued Non-bailable Warrants against the Directors of the Appellant Company, with a returnable date set for 26.04.2024.

SUPREME COURT OBSERVATIONS:

That the NCDRC, vide Order dated 02.04.2024, proceeded to issue Non-Bailable Warrants against the Directors of the Appellant-Company despite an Apex Court Order prohibiting coercive actions against them. Hence, the Bench issued a Notice to the Presiding Member and the Member of the NCDRC to explain how the Order dated 02.04.2024 had been passed in defiance of the Supreme Court’s directions of 01.03.2024.

CONCLUSION:

Based on the aforementioned facts, the Supreme Court has taken serious note of the NCDRC’s actions in issuing Non-Bailable Warrants against the Directors of the Appellant Company, despite clear directions from the Court to not take any coercive measures against them. Further, the Apex Court has issued a show-cause notice to the Presiding Member and Member of the NCDRC to explain their decision.

The NCDRC is required to respond to this notice within one week, and the Court has ensured that the NCDRC is promptly made aware of its order. Furthermore, all proceedings related to Execution Application No. 576 of 2022 in Consumer Complaint No. 773 of 2019 have stayed until further orders.

The matter will be heard again on 24.04.2024. This action by the Supreme Court underscores the importance of adhering to court directions and maintaining the integrity of the judicial process.

Sakshi Raghuvanshi

Legal Associate

The Indian Lawyer