Page 26 - Banking Finance February 2026

LEGAL UPDATE

protection from a Bengaluru trial court Significantly, the entire system has (NCDRC) directed the developer, Ansal
on February 17, 2024. been developed in-house by the Kerala Crown Infrabuild, to either complete
High Court, without reliance on exter- the project or refund the amounts in-
India gets its first fully nal proprietary platforms. vested by buyers along with interest.
The initiative was formally announced The order, however, was confined to
paperless district court in the company alone.
at an event held at the high court on
Kerala's Wayanad January 6. Chief Justice of India (CJI) Following the commencement of insol-

The judicial district of Kalpetta in Justice Surya Kant inaugurated the vency proceedings against the devel-
Kerala's Wayanad has marked a first paperless court virtually. oper and the resulting moratorium
for India by transitioning entirely to a Homebuyers can't execute under the Insolvency and Bankruptcy
paperless district court system, with all Code (IBC), execution against the
courts under its jurisdiction now func- decree against promoters company's assets stalled.
tioning exclusively in digital mode. without personal liability: The homebuyers' association then
Every stage of a case, from institution SC sought to recover the decretal amount
and pre-trial proceedings to evidence (total money a court orders someone
The Supreme Court has clarified that
recording, interim applications, and fi- to pay) from the company's directors
a decree passed only against a real
nal adjudication, is conducted elec- and promoters. It contended that en-
estate developer cannot be enforced
tronically. This has eliminated the need forcement against the corporate entity
against its directors or promoters in
for physical files. had become impracticable.
their personal capacity unless the origi-
The integration of artificial intelligence nal adjudication clearly finds them The NCDRC rejected this plea, holding
(AI)-based judicial assistance tools into liable. that its earlier order did not impose any
the district court management frame- Dismissing an appeal filed by home- personal liability on the directors.
work has accompanied the shift. buyers, a Bench of Justices Dipankar Challenging that view, the homebuyers

These tools are designed to generate Datta and Augustine George Masih approached the Supreme Court. Up-
structured summaries from electronic held that execution proceedings can- holding the NCDRC's approach, the
case records, enabling judges to quickly not be used to widen the scope of a court said execution could not proceed
decree or shift liability to individuals against individuals who were not judg-
grasp the factual matrix and proce-
dural history of matters before them. who were neither judgment debtors ment-debtors or guarantors.
nor found personally liable in the un-
Judicial officers can also interact with derlying proceedings. The judgment emphasised that the
the system through question-and-an- Consumer Protection Act contem-
A judgment debtor is someone a court
swer features to retrieve case-specific plates a full adjudicatory process, in-
has ordered to pay money to someone
information, while recording notes, cluding notice, pleadings, evidence and
else (the judgment creditor) because
marking statutory provisions and anno- recorded findings, before liability can
they lost a lawsuit or failed to meet an
tating documents directly on the digi- be fastened. T
obligation.
tal file.
"It is trite that a decree cannot, by
Voice-to-text technology has been de- process of execution, be employed to Join
ployed to ensure accurate transcrip- shift or enlarge liability so as to bind Online Certificate
tion of witness depositions and judicial persons who were neither parties to Course on
dictation. the decree nor otherwise legally liable Re-Insurance

Orders and judgments issued by the thereunder," the court observed.
courts are authenticated using secure The dispute arose from delays in the Management
digital signatures, granting them full Ansal Crown Heights housing project in For details please visit
legal validity while ensuring integrity Gurugram. In 2022, the National Con- www.smartonlinecourse.co.in
and authenticity. sumer Disputes Redressal Commission

BANKING FINANCE | FEBRUARY | 2026 | 23