[Corresponding to Section 10G of the Companies Act, 1956 (since repealed)]
In a Scheme of Demerger, sanctioned by the Hon’ble National Company Law Tribunal, Mumbai, one of the components of the Scheme was the change in name of the demerged company. The Demerged Company took steps upon the sanction of the Scheme, including steps to change its name by filing Form INC-24. Then began an endless wait; the Company did not get any response from the Registrar of Companies, Mumbai, nor was the filed form approved. The Company started sending emails seeking information from the RoC, Mumbai about the status of its application. One and half year passed, and no result. Finally, the Company sent a legal notice to RoC, Mumbai and Regional Director threatening to invoke Contempt jurisdiction in terms of Section 425 of the Act, which also met with the same stone wall response. Contempt against RoC? And that too for a mere Form INC-24? Perhaps the RoC and the RD thought it would never materialise.
The Company acted upon its threat and filed the Contempt Petition. On the first date, the Hon’ble Tribunal seemed initially reluctant on the maintainability of the Petition, but when it was taken through the relvant clause in the Scheme, its Order sanctioning the scheme and directions issued, along with the subsequent various correspondences with the Respondent RoC, Mumbai and RD, the Tribunal was convinced that it was a fit case.
In the span of four hearings, not only did the office of RoC, Mumbai acknowledge in writing that it had failed to respond to the emails and legal notice, but while shifting the blame on RoC, CPC Mannessar, forwarded the entire documents to RoC, CPC. The CPC expressed difficulty due to “glitch” in the system and its lawyer’s sought two months to respond to the Application. The Bench was not willing to take this nonsensical reply across the Bar and sought a detailed affidavit on the issue.
Before the next hearing, the form was reviewed, sent for resubmission and certificate with change of name was issued. Important here is that the form was resubmitted late Saturday night and the fresh Certificate of Incorporation was issued Monday morning (23rd February 2026) at the opening of office hours.
The Contempt Petition was finally disposed off today on 26 February 2026 and an order is expected. The Bench observed that the purpose of the Contempt Petition was achieved.
For purpose of academics, the contempt jurisdiction is briefly discussed as follows.
The Contempt of Courts Act, 1971 defines “contempt” in Section 2(a) as
“contempt of court” means civil contempt or criminal contempt;
Order 39 Rule 2A of the Code of Civil Procedure, 1908 deals with contempt of orders of injunctions issued by the Civil Courts.
Section 384 of the Bhartiya Nagarik Suraksha Sanhita, 2023 deals with procedure in cases of offences described in Sections 210, 213, 214, 215 or 267, if such are committed in the presence of any Civil, Criminal or Revenue Court, and such offence would amount to contempt of court.
The contempt jurisdiction is rarely acted upon by Courts. In Bunna Prasad v. State of U.P., 1968 SCC OnLine SC 64, the High Court has observed that
“Contempt of court is a serious matter and a High Court should be chary of finding a judicial officer guilty of contempt of court for disobeying its orders unless there is unimpeachable evidence that the judicial officer had knowledge of the order of the High Court.”
In Brahma Prakash Sharma v. State of U.P., (1953) 1 SCC 813, the Supreme Court has held that
“the object of contempt proceedings is not to afford protection to judges personally from imputations to which they may be exposed as individuals; it is intended to be a protection to the public whose interests would be very much affected if by the act or conduct of any party, the authority of the Court is lowered and the sense of confidence which people have in the administration of justice by it is weakened.”
The Companies Act, 1956, (as repealed) in Section 10G, and now in Section 425 of the Companies Act, 2013, had/has an express provision for invoking the Contempt jurisdiction. The section which provides for power of contempt reads as follows:
425. Power to punish for contempt.—The Tribunal and the Appellate Tribunal shall have the same jurisdiction, powers and authority in respect of contempt of themselves as the High Court has and may exercise, for this purpose, the powers under the provisions of the Contempt of Courts Act, 1971 (70 of 1971), which shall have the effect subject to modifications that—
(a) the reference therein to a High Court shall be construed as including a reference to the Tribunal and the Appellate Tribunal; and
(b) the reference to Advocate-General in Section 15 of the said Act shall be construed as a reference to such Law Officers as the Central Government may, specify in this behalf.
Corresponding Law : S. 10-G of Act 1 of 1956.
Date of Enforcement : Section 425 enforced w.e.f. 1-6-2016, vide Noti. No. S.O. 1934(E), dt. 1-6-2016.
Section 425 forms part of Chapter 27 which deals with the constitution, establishment, functioning, powers, authority and result of failure to comply with orders of NCLT. The exercise of power under Section 425 is similar to the exercise of powers by a High Court under the Contempt of Courts Act, 1971.
The aggrieved Company was forced to resort to the contempt proceedings because of the conviction that failure to comply with directions contained in the order sanctioning scheme of demerger was a sufficient cause of action. Insofar as the question of unimpeachable evidence is concerned, the fact of INC-24 having been filed, failure to process, repeated reminders and enquiries and finally, the legal notice, were strong documents to rely upon as evidence to show neglect, if not defiance, of the directions contained in the order.
The effect of the power under Contempt, if the Court is convinced that there exists a cause of action, can help in achieving quick resolution of intentional violation of orders of Courts.
What was set out to be an exercise in apprehension, concluded with the sought relief being obtained during the pendency of the Petition. Hope, is still alive; justice system functions, and functions effectively.
