Ansal Properties and Infra Ltd (APIL) has been held responsible by the National Consumer Disputes Redressal Commission (NCDRC) for the failures of its subsidiary, Ansal Hi-Tech Township Ltd (AHTTL), in a major ruling concerning delayed possession of flats in a Haryana township project, reports TOI.
The commission directed maintenance of status quo on APIL’s assets until further orders, while observing that the parent company could not escape liability for the acts and omissions of its subsidiary, which allegedly failed to construct and hand over flats to homebuyers for over 18 years in the ‘Megapolis Green Hi Tech Township’ project in the National Capital Region.
Accepting arguments presented by advocate Aditya Parolia, the bench said the corporate veil could be lifted when a subsidiary is used as a facade or when corporate structures are abused to commit fraud. It added that the doctrine of separate legal entity cannot be used as a “vehicle of injustice," TOI reported.
The bench comprising Inder Jit Singh and Sudhir Kumar Jain noted that APIL and AHTTL were “inextricably connected” and functioned in cohesion under the control and direction of Pranav Ansal, chairman and whole-time director of APIL, who was described as the key decision-maker for both entities and associated consortium members.
The commission further held that the current managing director and chief executive officer of APIL was liable for action under Section 72 of the Consumer Protection Act and issued notice seeking an explanation as to why action should not be initiated against him.
(With inputs from TOI)
The commission directed maintenance of status quo on APIL’s assets until further orders, while observing that the parent company could not escape liability for the acts and omissions of its subsidiary, which allegedly failed to construct and hand over flats to homebuyers for over 18 years in the ‘Megapolis Green Hi Tech Township’ project in the National Capital Region.
Accepting arguments presented by advocate Aditya Parolia, the bench said the corporate veil could be lifted when a subsidiary is used as a facade or when corporate structures are abused to commit fraud. It added that the doctrine of separate legal entity cannot be used as a “vehicle of injustice," TOI reported.
The bench comprising Inder Jit Singh and Sudhir Kumar Jain noted that APIL and AHTTL were “inextricably connected” and functioned in cohesion under the control and direction of Pranav Ansal, chairman and whole-time director of APIL, who was described as the key decision-maker for both entities and associated consortium members.
The commission further held that the current managing director and chief executive officer of APIL was liable for action under Section 72 of the Consumer Protection Act and issued notice seeking an explanation as to why action should not be initiated against him.
(With inputs from TOI)
