Threshold contempt scrutiny allows NCLT to seek replies and regulate procedure absent clear jurisdictional error or denial of natural justice.

The Delhi High Court held that writ interference was not warranted at the threshold stage of NCLT contempt proceedings because the impugned orders only initiated prima facie scrutiny and did not determine guilt or impose punishment. It further held that service of the contempt application, issuance of show-cause notice, and proceeding ex parte against some respondents did not violate natural justice or the NCLT Rules, 2016, since the tribunal could regulate procedure flexibly at the preliminary stage and any service defect was at most an irregularity.

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Issues: (i) Whether the writ petitions were maintainable at the threshold stage of the National Company Law Tribunal's contempt proceedings and whether the impugned show-cause process disclosed any jurisdictional or procedural illegality warranting interference; (ii) Whether the service of the contempt application, the issuance of show-cause notice, and proceeding ex parte against some respondents violated the principles of natural justice or the National Company Law Tribunal Rules, 2016.

Issue (i): Whether the writ petitions were maintainable at the threshold stage of the National Company Law Tribunal's contempt proceedings and whether the impugned show-cause process disclosed any jurisdictional or procedural illegality warranting interference.

Analysis: The power to punish for contempt under Section 425 of the Companies Act, 2013 operates through the framework of the Contempt of Courts Act, 1971, while the National Company Law Tribunal and the Appellate Tribunal are empowered to regulate their own procedure under Sections 424 and 469 of the Companies Act, 2013 and the National Company Law Tribunal Rules, 2016. The impugned orders did not decide guilt or impose punishment; they only initiated threshold scrutiny by calling for a response to determine whether a prima facie case of contempt existed. The availability of appellate remedies did not bar judicial review, but interference was unwarranted because no final contempt decision had been taken and no jurisdictional error or arbitrariness was shown.

Conclusion: The challenge to the initiation of contempt proceedings failed, and no writ interference was called for in respect of the threshold process.

Issue (ii): Whether the service of the contempt application, the issuance of show-cause notice, and proceeding ex parte against some respondents violated the principles of natural justice or the National Company Law Tribunal Rules, 2016.

Analysis: The Tribunal's procedure was tested against the scheme of Rules 38, 49, 51 and 59 of the National Company Law Tribunal Rules, 2016, together with the preliminary stage contemplated by Section 17 of the Contempt of Courts Act, 1971. Since formal cognizance and trial of contempt had not yet commenced, the Tribunal was entitled to seek replies, effect service in the manner adopted, and proceed ex parte where a party did not appear. The rules permit flexible procedure guided by natural justice, and the absence of a formal charge at this stage did not amount to denial of hearing. Any defect in service would, at most, be an irregularity capable of correction before the Tribunal.

Conclusion: No breach of natural justice or fatal procedural illegality was established.

Final Conclusion: The writ court declined to interdict the contempt proceedings, holding that the Tribunal's actions were confined to preliminary scrutiny and were consistent with the governing statutory and procedural framework.

Ratio Decidendi: In threshold contempt scrutiny, a tribunal empowered under the Companies Act, 2013 may call for a response and regulate service and appearance according to its rules, and writ interference is not warranted unless a clear jurisdictional error or denial of natural justice is shown.

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