NCLAT Dismisses Appeals: Contempt Orders Not Appealable Under Section 19

National Company Law Appellate Tribunal clarifies the non-maintainability of appeals against dismissal of contempt petitions lacking punishment for contempt.

In a significant decision on October 15, 2025, the National Company Law Appellate Tribunal (NCLAT), Chennai Bench, ruled against the maintainability of appeals concerning the dismissal of contempt petitions in cases where no punishment for contempt was imposed. The judgment was delivered by Justice Sharad Kumar Sharma and Jatindranath Swain in the matters of Mr. Srinivas Kalluri and others versus Mr. Birendra Kumar Agarwal and others.

The appellants had filed two company appeals under Section 61 of the Insolvency and Bankruptcy Code (I&B Code), 2016, read with Section 19 of the Contempt of Courts Act, 1971, against the orders of the National Company Law Tribunal (NCLT) dismissing their contempt petitions. The contempt petitions were originally filed under Section 425 of the Companies Act, 2013, read with the Contempt of Courts Act, 1971, alleging deliberate disobedience of court orders by the respondents.

The core of the dispute stemmed from an alleged non-compliance by the respondents in updating the Information Memorandum with details of liabilities towards the appellants, as ordered by the NCLT. The appellants claimed that the respondents failed to incorporate these details, constituting contempt of court.

However, the NCLAT observed that the provisions of the I&B Code, 2016, do not incorporate the contempt provisions from the Companies Act or the Contempt of Courts Act. The tribunal emphasized that for a civil contempt to be established, there must be deliberate and intentional disobedience of a court order, which was not evident in the present case. The tribunal further noted that insufficient disclosure in compliance with orders does not amount to contempt.

The tribunal elaborated on the legislative framework, explaining that Section 425 of the Companies Act, 2013, requires the application of the Contempt of Courts Act, 1971, to be effective. However, the I&B Code does not incorporate these provisions, rendering contempt proceedings under the I&B Code inapplicable.

Moreover, the NCLAT clarified that under Section 19 of the Contempt of Courts Act, 1971, an appeal is maintainable only against an order imposing punishment for contempt. Since the contempt petitions were dismissed and no punishment was imposed, the appeals did not qualify under Section 19.

The tribunal's decision aligns with previous Supreme Court judgments, which have consistently held that appeals in contempt matters are only permissible when punishment is imposed. This ruling underscores the importance of understanding the legislative boundaries and the jurisdictional scope of contempt proceedings within the framework of corporate and insolvency laws.

Bottom Line:

Contempt proceedings under Section 425 of the Companies Act, 2013 read with Contempt of Courts Act, 1971 are not maintainable for appeals against dismissal orders unless punishment for contempt is imposed.

Statutory provision(s): Section 425 of the Companies Act, 2013, Contempt of Courts Act, 1971, Section 19 of the Contempt of Courts Act, 1971, Section 12 of the Contempt of Courts Act, 1971, Insolvency and Bankruptcy Code, 2016.

Mr. Srinivas Kalluri v. Mr. Birendra Kumar Agarwal, (NCLAT)(Chennai Bench) : Law Finder Doc Id # 2801454