Financial Hardship Cannot Excuse Repeated Non-Appearance In Insolvency Proceedings: NCLT Mumbai

The National Company Law Tribunal, Mumbai on 4 September held that financial hardship or the fact that an applicant is itself under liquidation cannot substitute the requirement of showing sufficient cause for repeated non-appearance in insolvency proceedings.

A Bench comprising Judicial Member Nilesh Sharma and Technical Member Sameer Kakar dismissed liquidator Kairav Anil Trivedi's application seeking restoration of Cogent Engineers Private Limited's insolvency petition against KBK Chem-Engineering Private Limited under Section 9 of the Insolvency and Bankruptcy Code. The Tribunal observed:

“The insolvency jurisdiction under the Code is a statutory remedy and the Applicant is required to satisfy the procedural and limitation requirements applicable to the invocation of such remedy. The fact that the Applicant is itself under liquidation, or that it claims to be suffering financial hardship on account of non-payment by the Corporate Debtor, may explain its interest in pursuing the claim, but cannot substitute the requirement of demonstrating sufficient cause for the repeated non-appearance.”

On 22 May 2024, Cogent Engineers' insolvency petition was dismissed for non-appearance. Trivedi thereafter filed a restoration application, which was dismissed for default on 28 August 2024.

Trivedi then filed the present application on 6 August 2025, claiming that he had not received notice after the matter was transferred from one Bench to another. He also submitted that KBK had acknowledged outstanding dues of about Rs. 53.30 lakh.

The Tribunal found that the application was filed almost a year after the dismissal of the restoration application. Trivedi had not explained when he became aware of the 28 August 2024 order or what prevented him from approaching the Tribunal earlier. It held:

“The present Application has thereafter been filed only on 06.08.2025, i.e. almost one year after the dismissal of the earlier Restoration Application. The Applicant has not satisfactorily explained the circumstances, which prevented it from approaching this Tribunal immediately after the dismissal of Restoration Application No. 43/2024. The Application is conspicuously silent as to when the Applicant acquired knowledge of the order dated 28.08.2024 and what steps were taken between 28.08.2024 and 06.08.2025.”

Further, the Bench held that even if Trivedi had not received notice of the transfer, he had to explain his failure to diligently pursue the restoration application thereafter. It noted that Trivedi had appeared before Bench No. 4 on 15 July 2024, and therefore could not claim complete lack of knowledge regarding the transfer. Also, that Trivedi failed to establish a continuous and bona fide intention to pursue the proceedings.

Accordingly, the NCLT dismissed the application, while clarifying that it had expressed no opinion on the merits of Cogent Engineers' underlying claim against KBK.

For the Applicant: Adv. Kairav Trivedi