He locked out his father. The Supreme Court still let him off.

Two brothers, a father, and the company that nearly tore them apart

When Rama Narang and his two sons, Ramesh and Rajesh, stood before the Supreme Court in 2001, they had a deal. A family settlement, recorded as Minutes of Consent Order, was supposed to end a bitter war over Narang International Hotel Limited (NIHL)—a company with over 3,000 employees. The father and sons would run it together. Joint management. Shared control.

By 2008, the father was back in court, alleging his sons had locked him out again. The sons had already been convicted of contempt once, in 2007. Now Rama Narang wanted a second conviction. The stakes: not just the fate of a contempt petition, but whether a family settlement could survive when one side stopped cooperating—and whether a company could be run by court order at all.

The consent order that was supposed to end it

The original dispute was a classic family business war. Rama Narang, the father, had two sons from his first wife—Ramesh and Rajesh Narang. The family owned and controlled NIHL, a hotel company with thousands of employees. But control was the problem. In 2001, the Supreme Court stepped in and recorded a consent order. The terms were clear: the father and sons would manage the company jointly. Suits were transferred and decreed. The deal was done.

Or so everyone thought.

By 2003, the father was alleging that his sons had taken absolute control of NIHL, excluding him entirely. The Supreme Court agreed. In Rama Narang (V) v. Ramesh Narang (2009) 16 SCC 126, the sons were convicted under Section 2(b) of the Contempt of Courts Act, 1971 for wilful disobedience of the consent order. The sentence—two months simple imprisonment—was kept in abeyance. The Court gave them a chance.

But the father wasn't satisfied. In 2008, even before the first conviction was finalised, he filed a fresh contempt petition—Contempt Petition (Civil) No. 92 of 2008—alleging that his sons had continued to violate the consent order even after the 2007 finding. This time, the sons had a different story.

What the sons said: "He wouldn't let the company run"

The sons didn't deny that they had taken operational control. But they argued that they had no choice. The father, they said, was deliberately non-cooperative. He blocked every board resolution. He refused to sign cheques. He stalled every decision. The company, with 3,000+ employees, was grinding to a halt.

So the sons did what any party in a deadlock would do: they approached the Company Law Board (CLB) in New Delhi under Sections 397, 398, and 403 of the Companies Act, 1956. They sought relief against oppression and mismanagement. On 10 April 2008, the CLB appointed Justice Arvind V. Savant as a Facilitator to manage the company's operations. The sons complied with the Facilitator's directions. They argued that this compliance could not possibly be contempt of the Supreme Court's consent order—because the CLB, a competent judicial forum, had passed its own orders, and those orders were binding.

The father's response was sharp: the consent order was a family settlement, and the CLB had no jurisdiction to override it. The sons were using the CLB as a shield to justify their defiance.

The question the Supreme Court had to answer

Justice B.R. Gavai, writing for the two-judge Bench, had to decide a single, sharp question: did the sons' post-2007 conduct—specifically, their compliance with the CLB's Facilitator arrangement—constitute fresh contempt of the consent order?

The answer turned on three things: the scope of the CLB's jurisdiction, the nature of the sons' compliance, and the father's own conduct.

Why the CLB could act despite the consent order

The father's argument was straightforward: a consent order is a court order. Violating it is contempt. The CLB cannot override a Supreme Court order.

The Court disagreed—but not in the way the father expected. It held that a consent order regarding company management does not oust the statutory jurisdiction of the CLB under Sections 397, 398, and 403 of the Companies Act. The CLB retains jurisdiction to pass interim orders for regulating company affairs when a deadlock threatens the company's interests and its stakeholders. The consent order was not a blanket bar on the CLB's powers.

This is the first ratio: a consent order in a family dispute does not extinguish the statutory remedies available under company law. If the company is at risk, the CLB can step in.

The defence that saved the sons

The second ratio was even more important. The Court held that where a party acts in compliance with orders of a competent judicial or quasi-judicial forum—here, the CLB appointing a Facilitator—such compliance cannot constitute wilful disobedience of an earlier court order. This is especially true when the Supreme Court itself repeatedly declined to interfere with the Facilitator arrangement.

The sons had not acted unilaterally. They had gone to a statutory forum, obtained orders, and followed them. That is not contempt. It is the opposite of wilful disobedience.

THE PLAY: If you are bound by two conflicting orders from different forums, compliance with the later order of a competent forum is a complete defence to contempt—provided you sought that order in good faith and the earlier court has not set it aside.

The father's own conduct mattered

The third ratio was a reminder that contempt is not a one-way street. The Court held that in contempt proceedings arising from consent orders requiring joint management, the Court must consider whether the alleged contemnors' deviation was caused by the petitioner's own deliberate non-cooperation that threatened company survival and stakeholder interests.

The father had blocked the company's operations. He had refused to cooperate. The sons had to act to save the company. The Court was not going to punish them for that.

What the Court did not decide

The judgment also contained two important observations that were not strictly necessary for the decision but will matter in future cases.

First, the Court noted that no Director has proprietary rights over property owned by the Company. Residential accommodation provided to a Director is not personal property—it is a perquisite of office. This will be relevant in any dispute over company-owned residential property occupied by directors under consent arrangements.

Second, the Court observed that a petitioner cannot challenge orders of a competent judicial forum by way of an IA in contempt proceedings. The proper remedy is to appeal or challenge the order before the competent authority. Contempt proceedings are not a backdoor to collateral review.

Why this matters for practitioners

This judgment is a masterclass in the limits of contempt jurisdiction in commercial disputes. Three takeaways stand out.

First, consent orders are not bulletproof. If a statutory forum like the CLB has jurisdiction to pass orders in the interest of the company, those orders can coexist with a consent order. The consent order does not create a parallel legal universe.

Second, compliance with a competent forum's order is a complete defence to contempt. If you are caught between two orders, the safe harbour is to follow the later order of a competent forum—but only if you approached that forum in good faith and the earlier court has not set aside its order.

Third, contempt is not a weapon for the non-cooperative. If you block every decision, refuse to sign documents, and stall the company, you cannot then run to court and ask for your opponent's head on a platter. The Court will look at your conduct too.

The bottom line

If you are in a family business dispute and the other side stops cooperating, do not wait for contempt proceedings to pile up. Go to the statutory forum—the CLB, NCLT, or civil court—and seek a Facilitator or interim management order. Compliance with that order will protect you from contempt, even if an earlier consent order says something different. The Court will not punish you for keeping the company alive.