Contempt Needs Breach Of Clear, Unambiguous Directions, Not Vague Ones: NCLT Hyderabad

The National Company Law Tribunal (NCLT) at Hyderabad has recently held that contempt powers cannot be invoked unless a court's earlier directions are clear, specific, and unambiguous, and unless there is conscious and deliberate disobedience of those directions.

A coram of Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri said that while exercising contempt jurisdiction, the tribunal must strictly confine itself to the wording of the order alleged to have been violated. It said contempt jurisdiction cannot be invoked when directions are broad, general, or lacking precision.

“Further, while exercising jurisdiction under the Contempt of Courts Act, 1971, the Tribunal must confine itself strictly to the four corners of the order alleged to have been violated.”, it said.

“The scope of enquiry in contempt proceedings is limited to examining whether there has been a clear, specific, and unambiguous direction and whether there has been a conscious and intentional disobedience thereof. Where the directions are vague or capable of more than one interpretation, the appropriate course is not to invoke contempt jurisdiction but to seek clarification or further directions from the court which passed the original order.”, it added. 

The ruling came while dismissing a contempt application filed by a bankruptcy trustee against Ritesh Agarwal, the personal guarantor of Rajvir Industries Ltd., against whom bankruptcy proceedings are underway under the Insolvency and Bankruptcy Code.

The contempt plea was filed by Venkata Chalam Varanasi, the appointed bankruptcy trustee. He alleged that Agarwal failed to comply with an earlier order passed on June 23, 2025. That order had directed the personal guarantor to extend all assistance and cooperation to the trustee and to submit a statement of financial position as required under the Code.

The trustee told the tribunal that the June order was communicated to the personal guarantor and followed by repeated letters and reminders. He alleged that there was no response, no cooperation, and no submission of documents. According to him, the lack of cooperation was delaying the bankruptcy process and affecting the interests of creditors.

The tribunal, however, said the threshold for invoking contempt had not been met. It noted that the earlier order used broad language and did not spell out specific acts, timelines, or concrete obligations that the personal guarantor was required to perform.

The tribunal said contempt jurisdiction cannot be used to infer duties that are not expressly stated in the order.

“In the present case, the directions relied upon are general and wide in amplitude. In the absence of a clearly defined mandate specifying the precise acts to be performed by the Respondent, it cannot be conclusively held that there has been wilful or deliberate disobedience so as to attract the rigours of contempt.”

The tribunal added that where directions are vague or capable of more than one interpretation, the proper course is to seek clarification or further directions from the court that passed the order, rather than initiating contempt proceedings.

On this reasoning, the contempt application was dismissed.

For the Petitioner: Advocate Rishi Vincent

For Applicant: Advocate Y Suryanarayana

For Respondent/Contemnor: Advocate S Rajagopalan