Section 425 of the Companies Act, 2013 confers to the NCLT and the National Company Law Appellate Tribunal (‘NCLAT’), the power to punish for contempt.
In light of this, there have been conflicting rulings by various benches of NCLT regarding the applicability of contempt provisions of Companies Act, 2013 to the proceedings under IBC.
Those against the applicability of the power of contempt to the Adjudicating Authority while adjudicating matters relating to IBC, argue that there exists no particular provision in IBC that extends the power of contempt under section 425 of the Companies Act, 2013 to proceedings under IBC.
Those for the applicability of the power, argue that by virtue of IBC appointing the NCLT as the Adjudicating Authority for matters under IBC, the NCLT naturally draws the powers conferred upon it by the Companies Act, 2013.
This article goes on to examine the power of the NCLT to punish for contempt, through the lens of judicial pronouncements, and concludes that the NCLT does in fact have such a power and no new amendment or provision is required to extend the power given to the NCLT by the Companies Act, 2013.