High Courts Cannot Exercise Parallel Contempt Jurisdiction Over NCLT In IBC Cases: Bombay High Court

The Bombay High Court on Monday held that contempt petitions alleging breach of orders passed by the National Company Law Tribunal in insolvency cases cannot be filed directly before the High Court.

A single-judge bench of Justice Milind N Jadhav said that once contempt powers are conferred on the NCLT by law, the High Court should not exercise parallel jurisdiction.

“Hence, once such contempt jurisdiction is vested in the tribunal, this court ought not to exercise parallel contempt jurisdiction under Section 10 of the Contempt of Courts Act, 1971. It is therefore clear that entertaining contempt petitions directly before the High Court would allow parties to bypass the forum expressly empowered by the statutes,” the court said.

The petition was filed by S G Mittal Enterprises Pvt. Ltd. against Satara Sahakari Bank Ltd. The bank had extended a cash credit facility to the company on July 11, 2025. It later moved the NCLT's Mumbai bench in August 2023, alleging default.

During the proceedings, the parties settled the dispute. They executed consent terms in October 2024 for a one-time settlement of Rs 5.71 crore. The NCLT recorded the consent terms and closed the insolvency case on April 18, 2024.

S G Mittal Enterprises said it paid the full settlement amount. It sought a no-dues certificate. It alleged that the bank still raised a demand of Rs 18.57 lakh and reported outstanding dues to credit agencies. The company then moved the High Court alleging contempt of the NCLT's order.

Dismissing the petition, the court said the High Court's role, if any, is limited to supervision.

“Any supervisory intervention if required can be exercised only under Articles 226 and 227 of the Constitution of India. However, such supervisory jurisdiction is distinct from contempt jurisdiction and cannot be invoked by filing a Contempt Petition. Hence, in that view of the matter, I am of the considered opinion that the present Contempt Petition is not maintainable at the threshold and is liable to be dismissed,” the court said, dismissing the contempt plea