No appeal lies against dismissal of contempt petition; only orders imposing punishment are appealable.

The Appellants purchased a commercial unit in "Manjeera Mall" from the Corporate Debtor (CD) in 2014, paying full consideration

Following the initiation of Corporate Insolvency Resolution Process (CIRP) against the CD in 2023, the Appellants filed IA No. 314/2024 seeking a direction to the Resolution Professional (RP) to include their ownership and registration rights in the Information Memorandum (IM)

On 17.09.2024, the NCLT directed the RP to include these liabilities in the IM and inform the Appellants within 15 days

Alleging non-compliance, the Appellants filed Contempt Petition No. 7/2025 under Section 425 of the Companies Act, 2013

The NCLT dismissed the contempt petition on 26.03.2025

The Appellants then preferred this appeal under Section 61 of the I&B Code (IBC), 2016

The court primarily applied Section 425 of the Companies Act, 2013, which grants the Tribunal and Appellate Tribunal the same jurisdiction as High Courts to punish for contempt, subject to the Contempt of Courts Act, 1971

It relied on Section 19(1) of the Contempt of Courts Act, 1971, which stipulates that an appeal lies as of right only from an order or decision "in the exercise of its jurisdiction to punish for contempt"

Furthermore, the court applied the principle established in Midnapore Peoples Cooperative Bank Limited v. Chunilal Nanda & Ors. (2006), which holds that orders declining to initiate, dropping, or acquitting a contemnor in contempt proceedings are not appealable under Section 19

The Appellate Tribunal reasoned that Section 425 of the Companies Act must be read in conjunction with the Contempt of Courts Act, particularly the restrictive appellate provisions of Section 19

The court observed that the legislature specifically used the word "punishment" in Section 19(1), indicating that only orders imposing a penalty—and not those dismissing a petition or dropping proceedings—are appealable

The court further clarified the nature of contempt proceedings, noting that the petitioner acts merely as an "informer" or "messenger" to the court

Once the court is seized of the matter, the proceeding is not in persona but between the court and the contemnor; thus, the decision to drop proceedings is an exclusive prerogative of the court whose order was allegedly flouted

Consequently, as the impugned order dated 26.03.2025 resulted in the rejection of the contempt petition rather than a punishment, it falls outside the ambit of appealable orders

It ruled that under Section 19 of the Contempt of Courts Act (read with Section 425 of the Companies Act and Section 61 of the IBC), an appeal lies only against an order of punishment and not against the dismissal of a contempt petition

The Company Appeal was dismissed, and all connected interlocutory applications were closed