Headline: While exercising contempt jurisdiction, a court cannot modify its original order or decide the matter on its merits.

The petitioner filed an interlocutory application (I.A. 1285/KB/2024) before the NCLT challenging an e-auction notice and alleging interference with its 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 (Opposite Party) issued letters of intent to successful bidders following fresh auction notices

The petitioner filed contempt applications alleging violation of the July 3 interim order

By an order dated March 10, 2026, the NCLT dismissed the contempt applications and simultaneously directed that there should be no impediment for the liquidator to conclude the sale and execute sale certificates in favor of the auction purchasers

The petitioner challenged this direction under Article 227 of the Constitution

1. Whether the High Court can entertain a revisional application under Article 227 when an alternative statutory appellate remedy (before the NCLAT) is available

2. Whether the NCLT, while exercising contempt jurisdiction, has the power to pass directions on the merits of the underlying dispute or modify/vacate the original interim order

The court primarily applied the principle that an alternative remedy is not an absolute bar to Article 227 jurisdiction where a tribunal acts in excess of its jurisdiction or commits a patent error of law

Embassy Property Developments Pvt. Ltd. v. State of Karnataka

Regarding contempt, the court applied the doctrine that contempt jurisdiction is limited to upholding the majesty of the court and determining if there was willful disobedience; it cannot be used to adjudicate the merits of the case or grant substantive relief not sought in the original proceedings

Jhareswar Prasad Paul v. Tarak Nath Ganguly; Sudhir Vasudeva v. M. George Ravishekaran; Brahma Deo Mishra v. State of West Bengal

The High Court found that the NCLT was strictly exercising its contempt jurisdiction when it passed the impugned order

However, by directing the liquidator to proceed with the sale certificate, the NCLT effectively vacated its own prior interim restraint of July 3, 2024, without actually hearing the substantive interlocutory application on its merits

The court reasoned that while the order might have been appealable to the NCLAT, the NCLT’s action constituted a clear "excess of jurisdiction" because contempt proceedings must be confined to the "four corners of the order" alleged to be violated

The NCLT overstepped by issuing supplemental directions that touched upon the merits of the pending I.A. 1285/KB/2024 while ostensibly only deciding the contempt plea

The court set aside paragraph 12 of the NCLT's order (the direction to conclude the sale) but declined to order status quo ante since a third-party auction purchaser had already taken possession

It ordered that the issuance of the sale certificate and subsequent actions shall abide by the final result of the pending interlocutory application (I.A. 1285/KB/2024) and directed the NCLT to decide said application on its own merits without being influenced by the observations in the vacated contempt order