Sections 425 to 431 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 425 to 431 are the supporting provisions of Chapter XXVII. They give the NCLT and NCLAT a High Court's power to punish contempt, allow delegation of inquiries, treat Tribunal staff as public servants, protect good-faith action, let the Tribunal call on magistrates to seize property, keep civil courts out of the Tribunal's field, and save proceedings from invalidity on account of a vacancy.
The Tribunal and Appellate Tribunal have the same jurisdiction in contempt of themselves as a High Court (s.425). Civil courts cannot entertain any suit or proceeding on a matter the Tribunal is empowered to determine, and no injunction can be granted against action taken under the Act or other law by the Tribunal (s.430). No act of the Tribunal is invalid merely because of a vacancy or defect in its constitution (s.431). Action done in good faith is protected from suit or prosecution (s.428).
Sections 425 to 431 at a glance
| Section | Subject |
|---|---|
| 425 | Power to punish for contempt, with the powers of a High Court under the Contempt of Courts Act, 1971 |
| 426 | Delegation: officers or other persons may inquire into a matter and report |
| 427 | President, Members, officers and employees are public servants |
| 428 | Protection for action taken in good faith |
| 429 | Help from the Chief Metropolitan Magistrate, Chief Judicial Magistrate or District Collector to take possession of property and books |
| 430 | Civil court not to have jurisdiction; no injunction |
| 431 | Vacancy or defect in constitution does not invalidate acts |
Section 425: contempt
The Tribunal and the Appellate Tribunal have "the same jurisdiction, powers and authority in respect of contempt of themselves as the High Court has". They may use the powers under the Contempt of Courts Act, 1971, with two modifications: a reference to a High Court includes the Tribunal and the Appellate Tribunal, and the reference to the Advocate-General in section 15 of that Act is read as a reference to such Law Officers as the Central Government may specify.
For a litigant, the lesson is simple: an order of the Tribunal is not a suggestion. Wilful disobedience can be dealt with as contempt, in addition to enforcement as a decree under section 424(3). See section 424: procedure before the Tribunal.
If you are facing or bringing a non-compliance issue, our legal dispute resolution team can advise on the route.
Section 426: delegation
The Tribunal or Appellate Tribunal may, by general or special order, direct any of its officers or employees, or any other person it authorises, to inquire into any matter connected with a proceeding or appeal and to report to it in the manner specified. The order can carry conditions. The decision remains with the Tribunal; the delegate inquires and reports.
Section 427: public servants
The President, Members, officers and other employees of the Tribunal, and the Chairperson, Members, officers and other employees of the Appellate Tribunal, are deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).
Note on the old codes. The Indian Penal Code was replaced with effect from 1 July 2024 by the Bharatiya Nyaya Sanhita, 2023. The reference in the Act is now read as a reference to the new law.
Section 428: good faith
No suit, prosecution or other legal proceeding lies against the Tribunal, the President, Member, officer or employee, the Appellate Tribunal and its staff, or a liquidator or any other person authorised by either Tribunal, for loss or damage caused or likely to be caused by any act done in good faith, or intended to be done in good faith, in pursuance of the Act. The protection depends on good faith. It does not cover acts done in bad faith.
Section 429: help from magistrates and Collectors
Section 429(1) was substituted by the Insolvency and Bankruptcy Code, 2016, with effect from 15 November 2016. In proceedings for winding up of a company under this Act or proceedings under the Insolvency and Bankruptcy Code, 2016, the Tribunal can request, in writing, the Chief Metropolitan Magistrate, the Chief Judicial Magistrate or the District Collector within whose jurisdiction the company's property, books of account or documents are situated to take possession of them. That officer shall take possession and cause the items to be entrusted to the Tribunal or other persons it authorises.
Sub-section (2) allows the officer to take, or cause to be taken, such steps and use such force as in his opinion is necessary. Sub-section (3) says no act done by the officer in pursuance of the section can be called in question in any court or before any authority on any ground whatsoever.
This is why the section still matters even though inability to pay debts is now dealt with under the Code: the Tribunal can still wind up a company on the grounds left in section 271, and in any such case, or under the Code, this is the tool to secure records and assets. See grounds for winding up by the Tribunal under section 271.
Section 430: civil courts kept out
The text has two limbs.
- No civil court has jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force.
- No injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act or any other law by the Tribunal or the Appellate Tribunal.
Example. A minority shareholder files a civil suit seeking to restrain a board decision, when the dispute is one that the Tribunal can determine under the Act. The bar in section 430 stops the civil court from entertaining the suit. The remedy is before the Tribunal. See NCLT jurisdiction, powers and procedure under company law for the matters within its field.
Note that the bar applies to matters the Tribunal is empowered to determine. It is not a general exclusion of every dispute involving a company.
Section 431: vacancies
No act or proceeding of the Tribunal or the Appellate Tribunal is to be questioned, or invalid, merely on the ground of the existence of any vacancy or defect in the constitution of the Tribunal or the Appellate Tribunal. So an order cannot be challenged only because a Member's post was vacant or the Bench was not fully constituted. A challenge would have to rest on another ground, such as denial of a hearing. For how Benches are formed, see section 419: benches of the NCLT.
Proposed change (Corporate Laws (Amendment) Bill, 2026)
We found no clause in the Corporate Laws (Amendment) Bill, 2026 that amends any of sections 425 to 431. The Bill was introduced in Lok Sabha on 23 March 2026 and sent to a Joint Parliamentary Committee, whose report came on 3 August 2026. It is pending and not law as on 30 September 2026.
Need help with a dispute before the Tribunal?
Knowing which forum has jurisdiction, and what to do when an order is not obeyed, avoids wasted proceedings. Our legal dispute resolution team can help you choose the right forum and act on the order.
Key takeaways
- The Tribunals have a High Court's contempt powers for contempt of themselves.
- Civil courts are barred on matters within the Tribunal's power to determine, and no injunction lies against its action.
- Good-faith action is protected; the liquidator is also covered.
- In winding up or IBC proceedings the Tribunal can ask a magistrate or Collector to seize property and books.
- A vacancy or defect in constitution does not invalidate Tribunal acts.
- The IPC reference in s.427 is now read as a reference to the Bharatiya Nyaya Sanhita.
Read next
- Procedure before the Tribunal: section 424
- Legal representation and limitation: sections 432 and 433
- Benches of the NCLT: section 419
- Grounds for winding up by the Tribunal: section 271
Disclaimer: Based on the Companies Act, 2013 as amended up to 1 April 2021 (official consolidated text), read with later developments noted in the article; proposals in the Corporate Laws (Amendment) Bill, 2026 are pending and not law as on 30 September 2026. Verify current notifications and rules before acting.