Appeal Against Dismissal Of Contempt Petition By NCLT Not Maintainable: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT) at Chennai has recently held that an appeal against dismissal of a contempt petition by the National Company Law Tribunal (NCLT) is not maintainable before the Appellate Tribunal under Section 19 of the Contempt of Courts Act, 1971. A coram comprising Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain ruled that such an appeal would lie only against an order imposing punishment for contempt, not against a simple dismissal of contempt proceedings. The tribunal held “If the appeal is filed as against the order simpliciter dismissing the contempt petition, no appeal would lie because there being a specific intention of law of prescribing for an appeal, which is a creation of a statute, only as against an order of punishment, and no other exception has been safeguarded by the provision contained under Section 19 of the Contempt of Courts Act, 1971.” The case arose from a dispute involving buyers of immovable property of Manjeera Mall in Hyderabad, who had filed contempt petitions against the Resolution Professional and the Monitoring Committee of Manjeera Retail Holdings Pvt. Ltd., as well as Lulu International Shopping Malls Pvt. Ltd., the company that took over the project. The buyers claimed that their ownership details were not included in the financial documents of the company, even after the NCLT had directed that such information be disclosed. The buyers alleged that the Resolution Professional and the Monitoring Committee had failed to comply with NCLT's earlier orders directing them to include the buyers' property-related claims in the company's Information Memorandum. They argued that this amounted to wilful disobedience of the Tribunal's orders. The respondents, however, maintained that all relevant information had already been disclosed in the financial statements forming part of the Information Memorandum. They pointed out that the appellants' names were included under “Advance from Customers,” showing that their payments had been recorded. Accepting this explanation, the NCLT, Hyderabad held that there was no deliberate or intentional violation of its earlier orders and dismissed the contempt petitions.When the buyers appealed, the NCLAT upheld the NCLT's decision and specifically examined whether contempt proceedings can even be initiated under the Insolvency and Bankruptcy Code (IBC). The tribunal observed that the IBC does not specifically incorporate the provisions of the Contempt of Courts Act, 1971, or Section 425 of the Companies Act, 2013, which deal with the power to punish for contempt. It posed the question. “As to whether at all for any act of non-compliance of an order passed in any proceedings, which are carried under the provisions of I & B Code, whether the contempt proceedings, itself could be drawn, when under the I & B Code, itself the attraction of the provision of the Contempt of Courts Act, 1971, to be read with Section 425 of the Companies Act, 2013, has not been made either as a “legislation by way of reference or by incorporation?”, it posed. “But, unfortunately, for the reason best known to the framers of law, the provisions contained under Section 425 of the Companies Act, 2013, conferring the power to initiate a contempt, is not a power which has been prescribed to be given under the provisions of I & B Code.”, it added. Subsequently, citing Section 19 of the Contempt of Courts Act, the Tribunal clarified that an appeal lies only against an order of the High Court when it exercises its jurisdiction to punish for contempt. It ultimately held, “Since the order which has been challenged by invoking Section 19 of the Contempt of Courts Act, 1971, not being the order of punishment, appeal would not lie under Section 19 of the Contempt of Courts Act, 1971, which is to be read along with Section 425 of the Companies Act, 2013.” Holding so, the NCLAT dismissed the appeals filed by the buyers, holding that the appeal was not maintainableCase Title: Srinivas Kalluri and Anr v Birendra Kumar Agarwal, RP of M/s. Manjeera Retail Holdings Private Limited and Ors Case Number: Company Appeal (AT) (CH) (Ins) No.378/2025 For Appellant: Advocate Arun C MohanClick here to read/download judgment

Appeal Against Dismissal Of Contempt Petition By NCLT Not Maintainable: NCLAT Chennai

Sahyaja MS

Tags