The protection of moratorium under Sec. 14 of IBC will not be available to the directors/officers of the company | NCDRC can initiate proceedings for execution of decree against promoters of Corporate Debtor – Ansal Crown Heights Flat Buyers Association (Regd.) Vs. Ansal Crown Infrabuild Pvt. Ltd. and Ors. – Supreme Court
Hon’ble Supreme Court holds that:
(i) Approves the view taken in the case of P. Mohanraj & Ors. v. Shah Brothers Ispat Pvt. Ltd. (2021) ibclaw.in 24 SC that notwithstanding moratorium, the liability, if any, of the directors/officers will continue. The Hon’ble Court, therefore, permitted the appellants to expressly proceed against the promoters of the company though there was a moratorium under Section 14 of the IBC affecting the company.
(ii) Only because there is a moratorium under Section 14 of the IBC against the company, it cannot be said that no proceedings can be initiated against the opposite party for execution, provided that they are otherwise liable to abide by and comply with the order, which is passed against the company.
(iii) The protection of the moratorium will not be available to the directors/officers of the company.
