Court exercising contempt jurisdiction cannot modify original orders or grant substantive relief touching upon merits.

The petitioner filed an interlocutory application [I.A. (IBC) No. 1277/KB/2024] before the NCLT challenging an e-auction notice issued by the Liquidator (Opposite Party) and alleging interference with possession of land.

On July 3, 2024, the NCLT passed an interim order permitting the auction to proceed but restraining the finalization of the sale.

Subsequently, the Liquidator issued letters of intent to successful bidders following new auction notices in 2025.

The petitioner filed contempt applications alleging violation of the July 2024 interim order.

On March 10, 2026, the NCLT dismissed the contempt petitions and simultaneously directed that there should be no impediment for the Liquidator to conclude the sale and execute the sale certificate.

The petitioner moved the High Court under Article 227 of the Constitution, arguing the NCLT exceeded its jurisdiction.

The Court relied on the principle from Embassy Property Developments Pvt. Ltd. vs. State of Karnataka & Others, holding that Article 227 is maintainable if a tribunal assumes jurisdiction not vested in law.

Regarding contempt jurisdiction, the Court applied the doctrine established in Jhareswar Prasad Paul vs. Tarak Nath Ganguly and Sudhir Vasudeva vs. M. George Ravishekaran, which dictates that a court exercising contempt jurisdiction cannot function as an original or appellate court, must stay within the "four corners" of the order allegedly violated, and cannot grant substantive relief or reopen decided issues.

The Court also invoked the doctrine of actus curiae neminem gravabit (an act of the court shall prejudice no one).

The High Court found that while an appellate remedy existed, the NCLT's action constituted a jurisdictional error apparent on the face of the record, justifying intervention under Article 227.

The Court observed that the impugned order was passed solely within the context of contempt applications, not the substantive interlocutory application.

By directing the Liquidator to "conclude the sale process," the NCLT effectively vacated its own previous restraint order without a proper hearing on the merits of the main application.

Such a direction was held to be in excess of contempt jurisdiction, as the NCLT’s role was limited to determining if there was "willful disobedience," not to modify the original rights or status of the parties in the underlying litigation.

The Court declined to grant status quo ante because a third-party auction purchaser had already taken possession; instead, it held that the issuance of the sale certificate and all subsequent actions shall abide by the final result of the pending interlocutory application [I.A. (IBC) No. 1277/KB/2024].

The NCLT was directed to decide the main application on its own merits, uninfluenced by the observations made in the contempt proceedings.