NCLT Kochi: Contempt Not a Tool for Enforcement; Interim Breaches Merge into Final Order

April 6, 2026 : The National Company Law Tribunal (NCLT), Kochi Bench, has clarified that contempt jurisdiction cannot be invoked as a substitute for execution of orders, holding that once a final order is passed, all prior acts during the pendency of proceedings merge into it and cannot independently trigger contempt proceedings.

In Satish Gopalakrisha Pillai v. Vinesan Gopinathan & Ors., the Tribunal dismissed a contempt petition filed under Section 425 of the Companies Act, 2013 in relation to the insolvency proceedings of M/s Savute Textiles Private Limited.

The petition arose from alleged non-compliance with an earlier order dated April 25, 2024, by which the Tribunal had declared a Business Transfer Agreement void and directed restoration of assets along with payment obligations. The petitioner, a major shareholder, alleged that despite the order, the respondents had removed plant, machinery, and stock in November 2024, relying on the liquidator’s reports and supporting material to establish wilful disobedience.

The respondents contested the maintainability of the contempt petition, arguing that there was no deliberate or intentional violation of the Tribunal’s directions. They maintained that mere non-compliance does not constitute contempt and that the appropriate remedy lies in execution proceedings. They also denied allegations of asset removal, stating that only one machine had been temporarily moved for repairs with approval and subsequently returned.

The Tribunal, presided over by Member (Judicial) Vinay Goel, examined the scope of contempt powers and reiterated that such jurisdiction is quasi-criminal in nature and must be exercised sparingly. It emphasised that for civil contempt, there must be clear and wilful disobedience of an order, and mere failure to comply, including non-payment of monetary dues, is insufficient unless accompanied by deliberate intent.

Drawing from prior decisions and statutory provisions, the Bench underscored the distinction between “non-compliance” and “wilful disobedience,” observing that only the latter attracts contempt consequences. It further held that the legal framework under the Companies Act, 2013 and NCLT Rules provides a complete mechanism for enforcement of orders through execution, including attachment, recovery, and other measures akin to civil court decrees.

Significantly, the Tribunal ruled that once proceedings are finalised, all interim acts and issues stand merged into the final order, and alleged breaches of interim directions cannot be used to initiate contempt proceedings at a later stage. It held that permitting such actions would effectively convert contempt jurisdiction into an enforcement mechanism, which is not the intent of the law.

Finding no material to establish wilful and deliberate disobedience, the Tribunal held that the petition was an attempt to enforce compliance through contempt rather than through the prescribed execution process. Accordingly, the contempt petition was dismissed, with liberty granted to the petitioner to pursue appropriate execution proceedings in accordance with law.