Arrest Warrants Against Directors Under Section 72 CP Act Should Be Last Resort; Proper Procedure Must Be Followed: NCDRC

"The issuance of arrest warrants should be only when there is non-compliance of summons/notice issued by the State Commission for their appearance... it is for the court concerned to assess the situation and exercise discretion judiciously, dispassionately and without prejudice." National Consumer Disputes Redressal Commission (NCDRC), in an order dated June 15, 2026, has held that the issuance of arrest warrants against Directors of a company for non-compliance with a decree should be treated as a last resort.

A bench comprising Dr. Inder Jit Singh (Presiding Member) and Mr. Shashi Nandkeolvar observed that Consumer Commissions must follow the due process of law and provide a reasonable opportunity of being heard before resorting to coercive penal measures under the Consumer Protection Act, 2019.

The matter arose from an execution appeal filed by Ramprastha Promoters and Developers Pvt. Ltd. and its Directors against an order of the Delhi State Consumer Disputes Redressal Commission. The State Commission had issued arrest warrants against the Directors and ordered the auction of attached properties to recover a decretal sum of approximately ₹1.72 Crores. The Appellants contended that they had already paid a substantial portion of the amount and that the remaining liability was only about ₹57 Lakhs, making the State Commission’s calculation and the subsequent coercive steps legally flawed.

The primary question before the NCDRC was whether the State Commission could straightway issue arrest warrants against Directors for non-compliance with a decree without first following the procedure of summons and bailable warrants. The Commission also examined whether penal proceedings under Section 72 of the Consumer Protection Act, 2019, could be initiated against Directors who were not personal parties to the original consumer complaint.

Distinction Between Civil Enforcement And Penal Action Under CP Act

The NCDRC clarified the distinction between Section 71 and Section 72 of the Consumer Protection Act, 2019. It noted that while Section 71 deals with the enforcement of orders through civil execution, Section 72 provides for penal consequences, including imprisonment, for non-compliance. The Commission emphasized that while the personal assets of Directors cannot generally be attached under Section 71 if they were not parties to the original suit, they remain liable for penal action under Section 72 as the persons in charge of the company’s affairs.

Court Explains Liability of Key Managerial Personnel

The bench observed that for any act of non-compliance by a company, which is a juristic person, action must lie against those in day-to-day charge of its affairs. Relying on precedent, the Commission held that a Director’s responsibility arises from their role at the time the order was to be enforced. The NCDRC noted that a person who was a Director on or after the date of the decree continues to be liable for penal action, regardless of whether they have since ceased to hold that position.

"The issuance of arrest warrants against the Directors for compelling compliance is well within the ambit of statutory framework of the CP Act."

Arrest Warrants Must Not Be Issued Mechanically

Addressing the procedure for warrants, the NCDRC placed heavy reliance on the Supreme Court’s judgment in Inder Mohan Goswami vs. State of Uttaranchal. It held that since the issuance of non-bailable warrants involves interference with personal liberty, courts must exercise extreme caution. The Commission noted that the State Commission had straightway issued arrest warrants without first attempting to secure the presence of the Directors through summons or bailable warrants, which is contrary to settled legal principles.

"Personal liberty is paramount, therefore, we caution courts at the first and second instance to refrain from issuing non-bailable warrants."

Procedure Under BNSS 2023 And Summary Trial Rules

The Commission emphasized that during proceedings under Section 72, the Consumer Commission exercises the powers of a Judicial Magistrate of First Class. Therefore, the procedure laid down in the Bhartiya Nagrik Suraksha Sanhita (BNSS) 2023 (formerly CrPC) regarding summary trials must be observed. This includes issuing a show-cause notice and granting a reasonable opportunity to reply before taking coercive steps. The NCDRC stated that if a Director fails to appear despite summons, the Commission is then free to issue bailable, and eventually, non-bailable warrants.

"The objective is to ensure/secure the attendance of such Director(s)... as such proceedings are personal to such Directors and are akin to criminal proceedings."

Remand For Adjudication Of Decretal Amount Calculation

Regarding the dispute over the actual amount payable, the NCDRC found that there was a significant discrepancy between the figures recorded by the State Commission and the amounts allegedly paid by the Appellants. The Commission remanded this specific issue back to the State Commission, directing it to hear both sides and reach a definite finding on the balance decretal amount. The Appellants were given an opportunity to place their detailed calculations on record to resolve the dispute over the ₹1.72 Crore figure.

Final Directions and Conclusion

The NCDRC disposed of the appeal by protecting the Directors from coercive steps until the next date of hearing before the State Commission, scheduled for July 20, 2026. The Directors were directed to appear in person before the State Commission on that date and execute a suitable undertaking or bail bond to ensure their continuous attendance. The Commission clarified that as long as the Directors comply with the orders regarding their appearance, no arrest warrants shall be issued.

Date of Decision: 15 June 2026