Execution Cannot Exceed Adjudication: Supreme Court Bars Enforcement of Consumer Decree Against Directors Absent Prior Findings of Liability

“Execution Must Strictly Conform to the Decree; Liability Cannot Be Fastened Post-Facto on Directors Unproceeded in Main Complaint”, On January 12, 2026, the Supreme Court of India delivered a crucial ruling that draws clear boundaries around the powers of execution courts, especially in consumer matters involving corporate entities and their directors. The apex court upheld the National Consumer Disputes Redressal Commission’s (NCDRC) decision, holding that execution of consumer decrees cannot be extended to directors or promoters unless specific adjudication of personal liability had been made at the complaint stage.

The ruling addresses the increasingly common attempt by decree-holders to proceed against individuals associated with defaulting companies in execution, even when such individuals were never parties to the adjudicatory process.

“Where There Is No Finding, There Can Be No Execution”: Court Draws Line Between Decree and Executability

The case originated from consumer complaints filed in 2018 by the Ansal Crown Heights Flat Buyers Association on behalf of homebuyers who were aggrieved by the non-delivery of possession by M/s. Ansal Crown Infrabuild Pvt. Ltd. (ACIPL). The complaints, though initially filed against ACIPL and its directors/promoters (respondents 2 to 9), were consciously pursued only against ACIPL following a direction from the NCDRC dated January 25, 2018, which declined to issue notice to the directors/promoters. That order was never challenged and attained finality.

After the NCDRC passed final orders in 2022 directing ACIPL to either hand over possession with interest or refund the amounts paid by the allottees, execution proceedings were initiated. However, by then, a moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC) had come into force against ACIPL, stalling execution.

Attempting to circumvent the moratorium, the appellant Association sought to proceed against the directors/promoters. When the NCDRC declined to allow such execution, the appellant approached the Supreme Court, which initially remitted the matter back to the NCDRC to examine the issue of personal liability of the directors/promoters de hors the IBC bar. The Supreme Court, in its earlier order dated January 17, 2024, clarified:

“The protection of the moratorium will not be available to the directors/officers of the company. … It is open for the opposite party Nos. 2 to 9 to raise a contention that they are not bound to implement the order sought to be executed.”

Upon such remand, the NCDRC dismissed the execution applications against the directors/promoters. The Supreme Court has now affirmed that view, emphasizing that execution must follow the contours of the decree and cannot expand to include persons who were not part of the adjudicatory process.

Execution Court Cannot “Go Behind or Beyond” the Decree

The Court reiterated the settled principle that execution proceedings are limited in scope. Referring to its ruling in Rajbir v. Suraj Bhan (2022) 14 SCC 609, it stressed:

“It is well settled that the executing court cannot go beyond the decree. The decree must be executed as it is. Though, it is indeed open to the executing court to construe the decree; it cannot go beyond the decree.”

Justice Dipankar Datta, writing for the bench also comprising Justice Augustine George Masih, made it categorically clear that the directors/promoters (respondents 2 to 9) were never adjudged liable in the original complaints:

“No pleadings were directed to be filed against, nor issues framed in relation to the directors or promoters, and no findings came to be recorded against them at any stage of the adjudicatory process. … In the absence of pleadings, adjudication, or findings against them, the essential foundation for fastening liability … is plainly lacking.”

The Court also refused to accept the appellant’s argument that the doctrine of lifting the corporate veil could be invoked at the execution stage:

“The lifting of the corporate veil is an exceptional measure … to be resorted to only upon a clear finding that the corporate personality was abused for fraudulent or dishonest purposes. … No such allegation of fraud or misuse of the corporate form was either pleaded or established before the adjudicatory forum.”

Moratorium Shields Only Corporate Debtor – But Execution Still Needs Liability

While acknowledging that the IBC moratorium does not protect directors/promoters, the Court underscored that this only opens the door for execution proceedings — it does not, in itself, establish liability:

“The moratorium … does not preclude execution proceedings against directors or officers, provided they are otherwise liable. … The order dated 17th January, 2024, therefore, merely removed the moratorium-related impediment and did not expand the scope of the order or fasten liability upon the directors.”

Consumer Adjudication Must Follow Due Process – Directors Not Deemed Liable Without It

The judgment emphasizes that Consumer Protection Act adjudication is not a mere formality, and personal liability cannot be imposed without a complete adjudicatory framework of notice, pleading, opportunity, and findings. The Court warned against allowing execution to become a surrogate adjudication:

“Execution proceedings cannot be utilised as a surrogate forum to impose liability where none has been adjudicated.”

Furthermore, it rejected any attempt to impute liability on the basis of general association with the company, stating:

“Where the judgment debtor is a company, the liability of its shareholders or joint venture partners remains confined to … such guarantees or undertakings as may have been expressly furnished by them.”

In this case, the appellants failed to plead or prove any such personal guarantees or statutory exceptions.

Appeals Dismissed – Decree Executable Only Against Company, Not Its Directors

The Supreme Court concluded that the NCDRC’s refusal to proceed with execution against the directors/promoters was in full conformity with the law. The Court dismissed all pending appeals, while reserving liberty for the appellant to pursue other remedies under the Companies Act, IBC or civil law, should appropriate conditions be met.

“The appellant did not challenge the order dated 25th January, 2018 of the NCDRC declining to issue notice to the respondents 2 to 9 … and cannot now enlarge the order through execution.”

This landmark decision preserves the sanctity of the adjudicatory process, prevents post-decree expansion of liability, and reinforces the doctrine of corporate legal personality, while still leaving room for claimants to pursue lawful remedies where personal liability is independently established.

Date of Decision: January 12, 2026