Assignee of financial debt may seek restoration of a dismissed insolvency petition when substitution was pending and assignment was undisputed.

An assignee of financial debt who acquired the debt during pendency of a Section 7 insolvency petition was treated as capable of seeking restoration after the original applicant's petition was dismissed for non-prosecution. The analysis reads the term "applicant" broadly under the Insolvency and Bankruptcy Code, and treats the assignee as stepping into the original applicant's shoes once the assignment was undisputed and substitution had been sought. It further states that failure to complete formal substitution before dismissal should not defeat restoration where the assignee's interest and diligence were already on record, and concludes that rejection of the restoration request was erroneous.

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Issues: Whether an assignee of the financial debt, whose assignment was undisputed and who had sought substitution during the pendency of the insolvency petition, had locus to apply for restoration of a Section 7 petition dismissed for non-prosecution by the original applicant.

Analysis: The debt had been assigned to the appellant during pendency of the insolvency petition, the assignment was brought to the adjudicating authority's notice, and the appellant had taken steps to pursue substitution and restoration. The rules defining an applicant were read broadly enough to include a person capable of making an application under the Insolvency and Bankruptcy Code, and the assignee was treated as having stepped into the shoes of the original applicant. Denying restoration merely because the formal substitution had not been completed before dismissal was found to be unjustified, particularly when the assignee's interest and diligence were evident from the record.

Conclusion: The appellant had locus to seek restoration, and the rejection of the restoration application was erroneous.

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