NCDRC Allows Coercive Action Against Ansal For Non-Compliance, Says Corporate Veil May Be Lifted In Appropriate Cases

The National Consumer Disputes Redressal Commission (NCDRC), comprising Dr. Inder Jit Singh (Presiding Member) and Justice Sudhir Kumar Jain (Member), held that M/s Ansal Hi-Tech Township Ltd. (AHTTL) had failed to comply with the refund orders passed in favour of homebuyers, and that such non-compliance warranted strict enforcement. The Commission further observed that where the corporate structure is used to evade liability, the doctrine of lifting the corporate veil may be invoked, and directors/key managerial personnel may be held accountable. Brief facts of the case The complainants, a group of homebuyers, had booked residential flats in the project “Megapolis Green Hi-Tech Township” developed by M/s Ansal Hi-Tech Township Ltd. (AHTTL) around 2007. As per the Builder Buyer Agreements executed thereafter, possession was to be delivered within 42 months. Despite paying substantial amounts, the builder failed to complete the project and did not offer possession even after nearly 10 years. While the builder initially assured that there were no legal hurdles (letter dated 22.07.2011), it later, through a communication dated 26.04.2016, expressed inability to deliver possession and offered alternate units. Aggrieved, the complainants approached the NCDRC in 2017, seeking refund and compensation. The Commission, by order dated 11.03.2022, directed refund of the deposited amounts with 12% interest and costs within three months. However, due to non-compliance by the builder, execution proceedings were initiated. During these proceedings, it emerged that Ansal Properties & Infrastructure Ltd. (APIL) is the parent company of AHTTL, and allegations were raised that the corporate structure was being used to evade compliance with the decree. Contentions of the Opposite Parties (AHTTL / APIL / Directors) The opposite parties contended that AHTTL and APIL are separate legal entities, and the parent company cannot be held liable for the acts of its subsidiary. They argued that the directors and officers were not involved in the day-to-day affairs of AHTTL and hence cannot be held personally liable. It was further submitted that APIL was undergoing insolvency proceedings in certain cases, and therefore coercive steps against it were not permissible. The opposite parties also contended that execution proceedings cannot be used to impose liability on persons who were not parties to the original complaint, and that there was no justification to lift the corporate veil in the absence of fraud or misuse of the corporate structure. Observations and Decision The Commission observed that despite clear directions to refund the amounts, the builder (AHTTL) had failed to comply, showing repeated and wilful non-compliance of its orders. It held that execution proceedings must ensure effective enforcement of consumer decrees and cannot be frustrated by such conduct. The Commission also noted that recovery proceedings had been initiated as arrears of land revenue, attachment of properties had been undertaken, and bailable as well as non-bailable warrants had been issued against directors and key managerial personnel. Directions were also issued for disclosure of bank accounts, assets, and properties. On liability, the Commission observed that where a corporate structure is used to evade legal obligations, the doctrine of lifting the corporate veil may be invoked. It noted material indicating close connection and control between AHTTL and its parent company APIL. The Commission further held that directors and key officials cannot escape liability if they were responsible for the affairs of the company. It also clarified that insolvency proceedings would not automatically bar action where the project in question is not covered by the moratorium. Accordingly, the Commission permitted continuation of coercive steps such as recovery proceedings, attachment of properties, and issuance of warrants to ensure compliance with the decree. The matter has been listed for further hearing on 29.04.2026. Case Title: Prem Prakash Rajput & Ors. v. Ansal Hi-Tech Township Ltd. & Ors Case No.: EA No. 77 of 2021 (with connected Execution Applications) in Consumer Case No. 1951 of 2016 Appearances:For the Complainant / Decree Holders: Mantika Haryani, Bhanu Mishra (EA/77–78/2021); Saurabh Jain (multiple EAs across 2022–2025); Pranjal Mishra, Ishita Singh (EAs in 2022–2023); Aditya Parolia, Sumbul Ismail (EA 372/2022; 639/2023); Azhar Alam (EA 404/2022, 224/2022); Pramid Saxena, Dhiraj Singh (multiple EAs in 2022–2024); Madhurendra Kumar (EA/101/2024). For JD No. 1 (64/77/2023 & connected matters): Nehmat Sethi (EA/397/2022); Chetan Sharma (multiple EAs in 2022–2025); Sunil Mund (EA/440/2022); Haneef Mohamed (EA/435/2022); Rashmi Manshani (in person); Raghav Gupta (EA/419/2022); Rishabh Kumar Jain (EA Nos. 320/2022, 455/2022, 916/2023). None for others. Other Appearances: Pranav Ansal (in person) with Malak Bhat, Hitaish...

NCDRC Allows Coercive Action Against Ansal For Non-Compliance, Says Corporate Veil May Be Lifted In Appropriate Cases

Praveen Mishra

Tags