Is it compulsory that at least some people in a project must receive a D band?

I don't think it's compulsory unless managers want to give too many A bands

It is tracked at account level. Account have multiple projects and they have to fit the curve which means they have to give C and D bands. Now in some project C and D are more and in some project it is less as they are balancing everything at account level.

Whatever the case is, they are misusing it

Yes from what I understood it is done to ensure people remain compliant and adhere to the status quo.

But in reality its being misused alot of times to kick out people who fight with managers and so on.