S.19 of Contempt of Courts Act Limited to Punishment Orders: NCLAT Rejects Appeal Against Dismissal of Contempt [Read Order]

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, has ruled that appeals against dismissal of contempt petitions are not maintainable under Section 19 of the Contempt of Courts Act, 1971, as the provision applies only to orders imposing punishment.

The appeals arose from contempt petitions filed by homebuyers and stakeholders against the Resolution Professional and Monitoring Committee of Manjeera Retail Holdings Pvt. Ltd. The appellants alleged non‑compliance with earlier directions of the NCLT Hyderabad Bench, which had ordered inclusion of their liabilities in the Information Memorandum. They argued that the respondents had deliberately disobeyed tribunal orders, warranting contempt proceedings.

The NCLT dismissed the contempt petitions, finding no deliberate violation. On appeal, the NCLAT examined whether dismissal orders could be challenged under Section 19 of the Contempt of Courts Act.

Referring to Supreme Court precedents including Midnapore Peoples’ Cooperative Bank Ltd. v. Chunilal Nanda (2006) and Ajay Kumar Bhalla v. Prakash Kumar Dixit (2024), the Tribunal reiterated that Section 19 appeals lie only against punishment orders. Directions or dismissals in contempt proceedings are not appealable.

The Tribunal also addressed the broader question of contempt jurisdiction in insolvency proceedings. Section 425 of the Companies Act, 2013 empowers NCLT and NCLAT with contempt powers equivalent to High Courts, by incorporating the Contempt of Courts Act, 1971.

However, the Insolvency & Bankruptcy Code (IBC) does not expressly adopt Section 425 or the Contempt of Courts Act. The Bench observed that this legislative silence creates uncertainty about whether contempt powers can be exercised in IBC matters.

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While acknowledging the debate, the Tribunal refrained from conclusively deciding the applicability of Section 425 to IBC proceedings, noting that the issue is pending consideration in other matters. For these appeals, it limited itself to the narrower ground: since no punishment was imposed, appeals under Section 19 were not maintainable.

The two-member bench of SharadKumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) further clarified that contempt proceedings are essentially between the court or tribunal and the alleged contemnor. Applicants act only as informers, bringing alleged disobedience to the tribunal’s attention. Once contempt petitions are filed, the matter lies exclusively between the tribunal and the contemnor. Consequently, dismissal of contempt petitions does not confer a right of appeal under Section 19.

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