AI Drafter 
TaxTMI 
TaxTMI 
2026 (4) TMI 614
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....the petition filed by the Appellant under Section 9 of the Code. 2. The facts of the case which are relevant for this Appeal are as follows: • IA No. 195 (MP)/2022 in CP (IB) No. 1 of 2020 was an application filed under Rule 11 of the NCLT Rules, 2016 was filed by the applicant - V- Con Integrated Solutions Pvt. Ltd. • This IA was rejected and disposed of by the NCLT in its order dated 11.12.2024 against which this Appeal has been filed. Submissions of the Appellant: 3. Main Company Petition (MP) CP (IB) No. 1 of 2020 was dismissed for non- prosecution by the Hon'ble NCLT on 25.03.2022. The dismissal was not on merits but solely due to the non-appearance of counsel. 4. Hon'ble NCLT, while dismissing the said petition had explicitly granted liberty to revive the petition, thereby indicating that restoration was permissible. 5. Failure of the erstwhile counsel to inform the appellant about the dismissal of the main application due to non-appearance or lack of prosecution cannot be attributed to any fault or negligence on the part of the appellant. Appellant had duly engaged a counsel (erstwhile counsel) to represent it in Company Petition (MP)....
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.... disturbing feature of the case is that under our present adversary legal system where the parties generally appear through their advocates, the obligation of the parties is to select his advocate, brief him, pay the fees demanded by him and then trust the learned advocate to do the rest of the things. The party may be a villager or may belong to a rural area and may have no knowledge of the court's procedure. After engaging a lawyer, the party may remain supremely confident that the lawyer will look after his interest. At the time of the hearing of the appeal, the personal appearance of the party is not only not required but hardly useful. Therefore, the party having done everything in his power to effectively participate in the proceedings can rest assured that he has neither to go to the High Court to inquire as to what is happening in the High Court with regard to his appeal nor is he to act as a watchdog of the advocate that the latter appears in the matter when it is listed. It is no part of his job. Mr. A.K. Sanghi stated that a practice has grown up in the High Court of Allahabad amongst the lawyers that they remain absent when they do not like a particular Bench. Maybe....
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....s should have taken in the matter to avoid being thrown out unheard. In Rafiq and Anr. v. Munshilal and Anr. this Court succinctly brought out this aspect. Says the Court: The disturbing feature of the case is that under our present adversary legal system where the parties generally appear through their advocates, the obligation of the parties is to select his advocate, brief him, pay the fees demanded by him and then trust the learned advocate to do the rest of the things. The party may be a villager or may belong to a rural area and may have no knowledge of the court's procedure. After engaging a lawyer, the party may remain supremely confident that the lawyer will look after his interest. At the time of healing of the appeal, the personal appearance of the party is not ony not required but hardly useful. Therefore, the party having done everything in his power to effectively participate in the proceedings can rest assured that he has neither to go to the High Court to inquire as to what is happening in the High Court with regard to his appeal nor is he to act as a watchdog of the advocate that the latter appears in the matter when it is listed. It is no par....
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.... Authority of the e-filed affidavit, a circumstance entirely beyond the Appellant's control. 8. The Appellant submitted that it was unaware of the dismissal of the Section 7 Application on 30.09.2024 due to the failure of its then- counsel to communicate the status of the case or the dismissal order. The Appellant contended that despite multiple attempts to contact the then counsel, it received no response, leaving it uninformed about the proceedings until a new counsel was engaged. 20. The Respondent asserted that the dismissal of the Section 7 Application on 30.09.2024, was not solely for non-prosecution but also for non-compliance with the order dated 04.09.2024. The Respondent submitted that this dual basis for dismissal precludes restoration under Rule 48(2), which applies only to dismissals for non-appearance. 35. We note that the original petition was dismissed for non- prosecution on two accounts i.e., the non-presence of the Appellant or its counsel and secondly on account of non-submission of additional affidavit and documents. 39. We find that the Tribunal can allow the restoration application, if sufficient cause is made out by the li....
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....hough, it is the general practice to make a formal application under Section 5 of the Limitation Act, 1963, in order to enable the Court or Tribunal to weigh the sufficiency of the cause for the inability of the appellant/applicant to approach the Court/Tribunal within the time prescribed by limitation, there is no bar to exercise by the Court/Tribunal of its discretion to condone delay, in the absence of a formal application. 62. A plain reading of Section 5 of the Limitation Act makes it amply clear that, it is not mandatory to file an application in writing before relief can be granted under the said section. Had such an application been mandatory, Section 5 of the Limitation Act would have expressly provided so. Section 5 would then have read that the Court might condone delay beyond the time prescribed by limitation for filing an application or appeal, if on consideration of the application of the appellant or the applicant, as the case may be, for condonation of delay, the Court is satisfied that the appellant/applicant had sufficient cause for not preferring the appeal or making the application within such period. Alternatively, a proviso or an Explanation would hav....
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....ibunal observed that the application was not filed within 30 days from the date of dismissal and no petition for condonation was filed. 4. On notice the respondent have appeared and opposed the appeal on similar pleas which has been recorded by the Tribunal as noticed above. 5. From the record we find that the order of dismissal for non-prosecution was passed on 09.02.2017 and the Restoration Petition was filed on 29.6.2017. 6. Learned counsel for the appellant referred to Rule 15 of NCLT Rules, 2016 which reads as follows: "15 Power to extend time. The Tribunal may extend the time appointed by these rules or fixed by any order, for doing any act or taking any proceeding, upon such terms, if any, as the justice of the case may require, and any enlargement may be ordered, although the application therefore, is not made until after the expiration of the time appointed or allowed." 7. From the said Rules, we find that the Tribunal has power to extend the time appointed by the rules or fixed by any order for doing any act or taking any proceedings, upon such terms, if any, as the justice of the case may be required, although the application ....
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....period is fixed by or under these rules, or granted by the Tribunal for the doing of any act, or filing of any document or representation, the Tribunal may, in its discretion from time to time in the interest of justice and for reasons to be recorded, enlarge such period, even though the period fixed by or under these rules or granted by the Tribunal may have expired. ........ 155. General power to amend. - The Tribunal may, within a period of thirty days from the date of completion of pleadings, and on such terms as to costs or otherwise, as it may think fit, amend any defect or error in any proceeding before it; and all necessary amendments shall be made for the purpose of determining the real question or issue raised by or depending on such proceeding." 8. It is clear on a reading of the aforesaid Rules that the period of 30 days from the date of completion of pleadings is not sacrosanct inasmuch as under Rule 153, the Tribunal may, in its discretion, in the interests of justice and for reasons to be recorded, enlarge such period even though the period fixed has expired. Of course, this has to be done keeping in mind the time period fixed by Section 422 of the ....
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....t a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. b) Inder Singh v. State of Madhya Pradesh, (2025) SCC OnLine SC 600 (para 10,11, 15, 16 & 18) 10. It is submitted that the call off of two months in 12 months and 03 years as the case may be, is in breach of the orders passed in the Homeguard Sainik Evam Pariwar Kalyan Sangh (supra)by this court. It is contended that on account of the Call off, the Home Guard remain unemployed for two months and that the Rule 27 (1) (c) is violative of Article 14, 16, 19(1)(b) and 21 of the Constitution of India. 11. It is also contended on behalf of the Petitioners that Section 7(2) of the Act, has become unconstitutional by eflux of time as the rationale and determining principle used at the time of its enactment is no longer reasonable. It is submitted that at the time when the said provision was enacted, State Government did not need the Home Guards as a full time force....
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.... & Ors. [1972 (1) SCC 366 and G.Ramegowda, Major & Ors. v. Special Land Acquisition Officer, Bangalore [1988 (2) SCC 142 this Court observed that the expression "sufficient cause" in Section 5 of the Limitation Act must receive a liberal construction so as to advance substantial justice and generally delays be condoned in the interest of justice where gross negligence or deliberate inaction or lack of bonafide is not imputable to the party seeking condonation of delay. Law of limitation has been enacted to serve the interests of justice and not to defeat it. Again in N. Balakrishnan v. M.Krishnamurthy [1998 (7) SCC 123] this Court held that acceptability of explanation for the delay is the sole criterion and length of delay is not relevant. In the absence of anything showing malafide or deliberate delay as a dilatory tactics, the court should normally condone the delay. However, in such a case the court should also keep in mind the constant litigation expenses incurred or to be incurred by the opposite party and should compensate him accordingly. In that context the court observed: "It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5....
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....e ex-parte decree as well. Consequently, the appeal is allowed by setting aside the orders impugned. The appellant's application for condoning the delay and for setting aside the ex-parte decree shall stand allowed subject to payment of exemplary costs of Rs. 50,000/- to be paid to the opposite side within a period of 30 days. If the costs are not paid within the time specified, this appeal shall be deemed to have been dismissed and the ex-parte decree passed against the appellant revived. We may clarify that the costs awarded by this order are in addition to the amount of Rs. 10,000/- deposited in this Court for payment to the respondent vide order dated 3.11.2000. c) Collector, Land Acquisition, Anantnag & Ors. v. I Catiji & Ors., (1987) 2 SCC 107 (para 3) 3. Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side....
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....ll Developers (Supra), the Hon'ble Tribunal recorded that the main Company Petition itself was dismissed for non-prosecution, the first Restoration Application was again dismissed for non-appearance, and the second Restoration Application was also filed belatedly along with a delayed condonation application, thereby showing a consistent pattern of gross negligence, repeated defaults, and lack of bona fide intent on the part of the litigant. In stark contrast, in the present case, there is no repeated default or pattern of negligence. The Appellant filed the Restoration Application immediately upon gaining knowledge of the dismissal order and has acted diligently and bona fide at all stages. The delay is minimal, properly explained, and not deliberate. Therefore, the ratio of R Mall Developers (Supra) is wholly inapplicable to the present case, and the Respondent's reliance thereon is entirely misplaced. Therefore, the present case deserves a liberal approach in consonance with the law laid down by the Hon'ble Supreme Court and this Hon'ble Tribunal. 27. Relying on the above judgment, the appellant claims that even without an application seeking condonation of del....
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....ellant in favour of the Registrar, National Company Law Appellate Tribunal, New Delhi by bank draft by 30 November, 2017. On failure this order shall stand recalled. The appeal is allowed with the aforesaid observations and directions. *** 28. Appellant also claims that the Hon'ble Supreme Court in the case of Sesh Nath Singh & Anr. Versus Baidyabati Sheoraphuli Co-operative Bank Limited & Anr., (2021) 7 SCC 313 has held that Section 5 of the Limitation Act, 1963 does not speak of any application and the said section does not bars the tribunal of its discretion to condone delay, in the absence of any formal application. Submissions of the Respondent 29. The company petition CP (IB) No. 1 of 2020 filed by the Appellant under Section 9 of the IBC was disposed of by Ld. Hon'ble National Company Law Tribunal, Indore Bench vide order dated 25.03.2022, wherein it was observed that the said petition was disposed of owing to non-prosecution of the petition by the Appellant for a period of around 6 months. After such disposal on 25,03.2022, the Appellant had filed an Application bearing number IA No. 195 (MP) of 2022 before Ld. Hon'ble National Company, Law Tribuna....
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....any petition also mentions that the claims raised as an operational debt has been a pre-existing dispute. Regardless of the order dated 11.12.2024 disposing the restoration application and the order dated 25.03.2022 disposing the main company petition, had the matter been perused by the Hon'ble Tribunal, the said company petition of the Appellant bearing number CP (IB) 1 of 2020 is prima-facie liable to be dismissed on the merits of the case, for the reason of pre-existing dispute between the parties. 37. The present Reply is filed for the limited purpose for opposing the maintainability of the present Appeal. 38. The present appeal is not maintainable and hence liable to be dismissed. Appraisal 39. We have heard the counsels of both sides and also perused the materials placed on record. 40. The Appellant claims that they filed a Restoration Application on 13.08.2022 under Rule 11 of the NCLT Rules, 2016 for seeking restoration of the main petition i.e. (MP) CP (IB) No. 1 of 2020 filed under Section 9 of the Code. The reasons claimed for restoration of the main petition was that the erstwhile counsel had not informed them about the none appearance and counsels' i....
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.... 11. Inherent Powers. - Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal. 15. Power to extend time. The Tribunal may extend the time appointed by these rules or fixed by any order, for doing any act or taking any proceeding, upon such terms, if any, as the justice of the case may require, and any enlargement may be ordered, although the application therefore is not made until after the expiration of the time appointed or allowed. 48. Consequence of non-appearance of Applicant - (1) Where on the date fixed for hearing of the petition or application or on any other date to which such hearing may be adjourned, the Applicant does not appear when the petition or the application is called for hearing, the Tribunal may, in its discretion, either dismiss the application for default or hear and decide it on merit. (2) Where the petition or application has been dismissed for default and the Applicant files an application within thirty days from the date of dismissal and satisfies t....
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....al of the petition along with sufficient cause of non- appearance when the petition was called for hearing. In this case the petition was disposed of on 25.03.2022 on account of multiple non-appearances. And the instant interlocutory application in respect of seeking revival of disposed of petition was filed on 13.08.2022 with a delay of about five months. We observe that the petition of the Applicant under Section 9 of the IBC was disposed of after AA noted non-prosecution on behalf of the Applicant for a period around 6 months. Even after such disposal on 25.03.2022, the Applicant had come up before NCLT seeking revival of the disposed of petition, after more than 5 months. We note that the instant application doesn't stand in consonance with the provisions enshrined under Rule 48 of the NCLT Rules. 45. We also note that time is of the essence in insolvency proceedings and the appellant could not have been lax in his appeal. Before its dismissal and thereafter for restoration, the appellant has not been vigilant enough and he cannot take refuge that the Advocate appearing on his behalf did not brief him about the proceedings. This cannot be a sufficient cause for condonati....
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....en a procedure has been prescribed for a particular purpose exhaustively, no power shall be exercised otherwise than in the manner prescribed by the said provisions. In such cases, the court must be circumspect in invoking its 'inherent powers' to deviate from the prescribed procedure. If such deviation is made, the court must justify why this was necessary to "prevent the abuse of the process of the Court". 71. The need to be circumspect while invoking "inherent powers", when there is an exhaustive legal framework is amplified in the context of a legislation like the IBC. In Ebix Singapore (P) Ltd. v. Educomp Solutions Ltd. (CoC), 2021: INSC:468: (2022) 2 SCC 401 a two- judge bench of this Court, speaking through one of us (D.Y. Chandrachud, J.), affirmed this position and observed as follows: Any claim seeking an exercise of the adjudicating authority's residuary powers Under Section 60(5)(c) IBC, NCLT's inherent powers Under Rule 11 of the NCLT Rules or even the powers of this Court Under Article 142 of the Constitution must be closely scrutinized for broader compliance with the insolvency framework and its underlying objective. The adjudicating mecha....
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....3. The Adjudicating Authority vide its impugned order dated 28.03.2023 has dismissed the said application on the ground of delay in filing of the Application for restoration. 4. On notice, Id. Counsel for the Respondent has appeared and opposed the appeal on similar pleas which has been recorded by the Adjudicating Authority in the impugned order. Further, Ld. Counsel for the Respondent has submitted that the Appellant has neither given any cogent reasons in the application seeking restoration of the Application for 150 days' delay in filing the Restoration Application nor filed any application for condonation of delay to condone those days. It is submitted that non- appearance of the Appellant has been recorded in the order dated 23.11.2021 passed by the Adjudicating Authority which read as under: "From the previous orders, it is also seen that the Petitioner in the matter has not been present on 18.03.2021, 10.08.2021 and on today's hearing, no one present on behalf of the Operational Creditor. In view of the above, the finally listed for further consideration as a last chance for ensuring the appearance on behalf of the operational creditor on ....
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....hough the preexisting dispute may not help the case of the appellant. 52. Now we look into some other authorities relied upon by both sides. Authorities relied upon by the Appellant: Sesh Nath Singh v. Baidyabati Sheoraphuli Cooperative Bank Ltd., (2021) 7 SCC 313. 53. Appellant contends that in this case, the Hon'ble Supreme Court held that by virtue of Section 238-A of the IBC, the provisions of the Limitation Act, 1963- including Section 5-apply to proceedings under Sections 7 and 9. The Court also clarified that a formal application for condonation is not indispensable, so long as the material on record discloses "sufficient cause." Thus, NCLT's insistence on a separate delay condonation application in IA 195(MP) of 2022 is not sustainable. Appellant-V-Con argues that substance prevails over form, and that the Tribunal ought to have examined the explanation embedded in the restoration application itself. We don't have any disagreement with the cited judgment but it doesn't help the appellant's case as it has not been able to show sufficient cause for the condonation of delay. We further find that even though the adjudicating authority has noted that there is no dela....
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....stem, a litigant is entitled to rely on counsel and is not expected to monitor every procedural step. Appellant uses it to justify V-Con's claimed lack of knowledge of dismissal until 28.07.2022 as consistent with normal legal practice. As noted by us earlier also the appellant has not been vigilant enough in time bound IBC proceedings and therefore it cannot claim that lack of knowledge which led to the dismissal and therefore this judgment is of no assistance to the appellant. Moreover, we note that the law has been clearly laid down - not only in the form of IBC 2016 but also in various judgments of Hon'ble Supreme Court. Vamsidhar Maddipatla vs Teckbond Laboratories Pvt Ltd, 2017 SCC OnLine NCLAT 604 58. The NCLAT held that Rule 15 of the NCLT Rules allows enlargement of time even beyond the 30-day limit in Rule 48(2) and that restoration can be granted without a separate condonation application where sufficient cause exists. We find that law has been settled in subsequent judgement of Hon'ble Supreme Court GLAS Trust Company LLC (supra) and therefore the judgment of this Appellate Tribunal may not of any assistance to the Appellant. Sunita v Lalit Sansanwal 2024 DHC 4....
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....n account of multiple non-appearance, the main petition was disposed of vide order dated 25.03.2022. Further, the Applicant/Operational Creditor has also not filed any application for condonation of delay in filing of the Restoration Application beyond the prescribed 30 days under Rule 48(2) of the NCLT Rules, 2016. As such, this restoration application deserves to be rejected." 67. We further observe that the original IA No. 195 of 2022 was filed under Rule 11 of the Code. It provides for inherent powers with the NCLT to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal. This has been clearly interpreted in various judgments that inherent powers may be exercised in cases where there is no express provision under the legal framework. In the present case, there is a clear express provision under Rule 48(2) of NCLT Rules, which prescribes for restoration of the application in such cases. Therefore, the IA could not have been entertained under Rule 11 of the NCLT Rules as it would be in contravention of the express provisions of the law. The restoration application was required to be filed within a specified peri....