The National Company Law Tribunal (NCLT) Mumbai Bench-I has held Nirav Anupam Tarkas, the former liquidator of Euro Ceramics Limited, guilty of contempt for his persistent failure to refund excess fees withdrawn from the corporate debtor ’s liquidation account. In a decisive order, the tribunal directed the former insolvency professional to deposit ₹72,51,530, along with applicable GST and interest, into the company’s account. The bench, comprising Shri Prabhat Kumar (Member Technical) and Shri Sushil Mahadeorao Kochey (Member Judicial), stipulated that failure to purge this contempt within 30 days would result in a sentence of one week of simple imprisonment in civil prison .

The current liquidator , Mr. Premraj Ramratan Laddha, had moved the tribunal under Section 425 of the Companies Act, 2013 , read with Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016 , alleging wilful disobedience of a prior tribunal order dated October 31, 2025 . That initial directive, which was subsequently affirmed by the National Company Law Appellate Tribunal (NCLAT) and reached finality after a failed challenge in the Supreme Court , mandated that Mr. Tarkas return the unauthorized fee withdrawals. Despite the legal finality of these proceedings, the respondent remained non-compliant, prompting the current contempt petition.

Challenging the Authority of Judicial Orders

In his defense, Mr. Tarkas argued that the proceedings were improperly framed as contempt . He contended that the alleged non-compliance amounted merely to a failure of execution, which should be addressed through standard recovery proceedings rather than the stringent machinery of contempt . Furthermore, he claimed that the amount sought by the applicant included GST components which had already been offset against the corporate debtor ’s own tax liabilities, suggesting the applicant had suppressed material facts.

The tribunal dismissed these contentions, emphasizing that the finality of the Supreme Court ’s dismissal of the appeal rendered any dispute regarding the quantum or nature of the amount entirely meritless in the context of a contempt proceeding. The bench observed that the insolvency professional , while acting in a fiduciary capacity for the corporate debtor , had engaged in unilateral withdrawals that defied the established legal framework. Even if the respondent believed his actions were justifiable, the tribunal found that the failure to refund the amount upon being directed by the court constituted an affront to the administration of justice .

The tribunal underscored the significance of maintaining the sanctity of judicial directions. In its observation, the bench noted: “The contemptuous act complained of must be such that would result in obstruction of justice, adversely affect the majesty of law and impact the dignity of the courts of law.” By failing to abide by a clear, binding order, the respondent’s conduct was categorized as a deliberate defiance that necessitated intervention to preserve public confidence in the judicial process.

Jurisprudential Basis for Contempt Actions

The NCLT’s reliance on Section 425 of the Companies Act, 2013 , establishes that it exercises the same jurisdiction as a High Court regarding its own contempt matters. This includes the power to punish for wilful disobedience of any order, decree, or process. The bench looked to the precedent set by the Supreme Court in Celir LLP v. Mr. Sumati Prasad Bafna & Ors. , which highlights the dual objective of the contempt jurisdiction: punishing the offender and ensuring the majesty of the law remains unimpaired.

The tribunal further cited the principle established in Ram Kishan v. Tarun Bajaj & Ors. , stating that the: “ contempt jurisdiction conferred on to the law courts power to punish an offender not only for his wilful disobedience but also for contumacious conduct or obstruction to the majesty of law .”

By failing to refund the money after the Supreme Court dismissed his appeal in August 2026 , the respondent demonstrated a pattern of behavior that the tribunal viewed as inherently contumacious. The court rejected the argument that the dispute over the GST component provided a valid excuse for the delay. The bench clarified that even if input tax credits were applicable, only the proportionate GST could have been deducted, and certainly not the entirety of the disputed sum. Regardless of technical accounting nuances, the tribunal concluded that the respondent’s failure to act promptly after the initial order was issued pointed toward a conscious disregard for the tribunal's authority.

Enforcing Accountability in Liquidation

The current order serves as a stern reminder to insolvency professionals that their status as officers of the court does not insulate them from rigorous oversight. By imposing a sentence of imprisonment—should the contempt not be purged—the NCLT has reinforced that the liquidation process must be characterized by transparency and strict adherence to judicial oversight.

Beyond the contempt finding, the tribunal granted liberty to the current liquidator to pursue formal execution proceedings if the respondent fails to comply within the specified 30-day window. The respondent is required to surrender before the tribunal within two days of the order’s communication, failing which a warrant of arrest will be issued. Furthermore, the applicant has been directed to deposit the necessary subsistence allowance with the jail authorities should incarceration become necessary.

This matter is set for further review and compliance reporting on November 30, 2026 . The case underscores a growing trend within the insolvency regime where tribunals are increasingly inclined to utilize their contempt powers to penalize professional misconduct that threatens the efficiency and integrity of the corporate liquidation process. The directive ensures that the assets of the corporate debtor , meant for the benefit of stakeholders, are returned without further obstruction, thereby reinforcing the ultimate purpose of the bankruptcy proceedings.