NCLAT Chennai: Appeal Against Dismissal of Contempt Petition Not Maintainable Without Punishment

April 6, 2026 : The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, has reiterated that an appeal against the dismissal of a contempt petition is not maintainable unless the order imposes punishment for contempt. The ruling clarifies the scope of appellate jurisdiction under Section 19(1) of the Contempt of Courts Act, 1971.

A Bench comprising Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) dismissed a company appeal filed by bankruptcy trustee Venkata Chalam Varanasi against the rejection of his contempt application.

The dispute originated from an application filed before the National Company Law Tribunal (NCLT), where the appellant sought directions against the respondent, Upender Kumar Agarwal, to cooperate and furnish a statement of financial position as required under Section 129 of the Insolvency and Bankruptcy Code, 2016 read with applicable regulations.

By an order dated June 23, 2025, the Adjudicating Authority directed the respondent to extend cooperation and warned that failure to comply could invite appropriate action.

Alleging non-compliance, the appellant initiated contempt proceedings under Section 425 of the Companies Act, 2013 read with relevant provisions of the Contempt of Courts Act. However, the NCLT, by its order dated January 20, 2026, dismissed the contempt application, holding that no deliberate violation of its earlier directions had been established.

Challenging this dismissal, the appellant approached the NCLAT. The Appellate Tribunal examined the maintainability of the appeal in light of Section 19 of the Contempt of Courts Act, which governs appeals in contempt matters.

The Tribunal observed that powers of contempt exercised by tribunals under Section 425 of the Companies Act are subject to the framework of the Contempt of Courts Act. Consequently, appeals in such cases are strictly governed by Section 19 of the Act.

Interpreting Section 19(1), the Bench held that an appeal lies only against orders where punishment has been imposed for contempt. Since the contempt petition in the present case had been dismissed without any punishment, the statutory condition for filing an appeal was not satisfied.

The Tribunal also clarified the legal position regarding the role of an applicant in contempt proceedings, stating that such an applicant merely acts as an informer bringing alleged non-compliance to the notice of the court or tribunal. Once the matter is taken up, the proceedings fall within the exclusive domain of the adjudicating body.

It further noted that in cases where punishment is imposed, the right to appeal under Section 19 is available to the contemnor and not to the applicant who initiated the contempt proceedings.

At the same time, the Bench emphasized that tribunals remain responsible for ensuring compliance with their orders to preserve the authority and sanctity of judicial proceedings.

Finding no merit in the appeal, the NCLAT held it to be not maintainable and dismissed the same.

Case Title: Venkata Chalam Varanasi v. Upender Kumar Agarwal
Case No.: Company Appeal (AT) (CH) (INS) No. 189 of 2026