NCLAT Restores Insolvency Petition Dismissed After Counsel Missed Hearing

The National Company Law Appellate Tribunal (NCLAT), Delhi, has held that an insolvency petition dismissed for want of prosecution can be sought to be restored through a restoration application accompanied by a plea for condonation of delay.

The tribunal ruled that a litigant should not be made to suffer when the non-appearance was due to a bona fide mistake by counsel.

The bench comprised Judicial Member Justice Sharad Kumar Sharma and Technical Member Indevar Pandey.

“Rule 48(2) of the NCLT Rules, 2016, which prescribes for 30 days of limitation, could also be condoned on a supporting delay condonation application to be filed by the applicant seeking recall of the Order dismissing the company petition for want of prosecution,” the bench observed.

Icatalyst Wealth Advisors Pvt. Ltd. had initiated insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Sir John Bakeries India Pvt. Ltd. The petition was dismissed for want of prosecution on March 17, 2025, after Icatalyst's counsel missed the hearing due to a misunderstanding over the sitting time.

Icatalyst then approached the NCLT seeking restoration, maintaining that the absence was neither deliberate nor intentional. It also filed a delay-condonation application, but the application was not registered or placed before the NCLT when the restoration plea was considered.

The NCLT rejected the restoration application on October 9, 2025, prompting Icatalyst to approach the NCLAT.

It took the view that since the restoration application had been filed after a considerable period following the dismissal, it ought to have been accompanied by a delay-condonation application.

Before the NCLAT, Icatalyst contended that the delay-condonation application had in fact been filed along with the restoration application. It was supported by an affidavit and accompanied by a separate court fee.

However, the delay-condonation application was not registered and consequently was not placed before the NCLT when the restoration application was considered.

The NCLAT noted that the rules governing restoration allow an applicant to seek restoration of a petition dismissed because the applicant did not appear when the matter was called.

Ordinarily, such an application is to be made within 30 days, with the applicant required to show sufficient cause for the absence.

The appellate tribunal held that this provision does not create a specific bar against considering a restoration application filed after 30 days. It said the provision has to be read harmoniously with the NCLT's inherent power to pass orders necessary to meet the ends of justice.

In the present case, the NCLAT found the explanation for the counsel's absence to be bona fide. The counsel had explained that the tribunal's sitting had been preponed, which prevented him from coordinating his appearance.

The bench also noted that this explanation had remained unrebutted. It found no reason to disbelieve Icatalyst's stand that a delay-condonation application had been filed along with the restoration application.

The NCLAT observed that if the delay-condonation application was not presented before the NCLT for consideration, Icatalyst could not be made to suffer on that account. This was particularly so because the original absence was attributable to the counsel's non-availability.

“If the delay condonation application is not presented before the learned Tribunal for its consideration, the appellant cannot be made to suffer and that too on an aspect or the issue of limitation, which cannot be exclusively taken as to be the basis for rejecting the restoration application and that too, more importantly, when the absence is attributable to non-availability of the Counsel,” the bench observed.

The bench further reiterated that a litigant should not suffer because of a counsel's failure to appear on an assigned date. It found that the NCLT had failed to take into consideration Icatalyst's stand that the restoration application was filed along with a delay-condonation application.

“Even otherwise also, the law is well settled that none of the litigant is made to suffer due to dereliction on the part of the Counsel, to appear in the proceedings on an assigned date,” the bench observed.

The NCLAT accordingly quashed the NCLT's October 9, 2025 order and allowed the restoration application.

The insolvency petition filed by Icatalyst against Sir John Bakeries India Pvt. Ltd. has been restored to its original number and is to be decided on its own merits.