Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCLAT) 422

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Arun Baroka, Member (Technical)
V-Con Integrated Solutions Pvt. Ltd. – Appellant
Versus
Shreeram Technology Services Pvt. Ltd. – Respondent
Company Appeal (AT) (Insolvency) No. 283 of 2025|IA No. 195 (MP) of 2022|Company Petition (MP) CP (IB) No. 1 of 2020

Advocates:
For the Appellants/Petitioners: Mr. Yashvardhan, Mr. Devesh Mohan, Mr. Gyanendra Shukla, Mr. Pranav Das
For the Respondents: Mr. Rohit Dubey

Inherent powers cannot override Rule 48(2)'s 30-day limit for restoring non-prosecuted petitions; counsel's negligence not sufficient cause absent litigant diligence in time-sensitive insolvency proceedings.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 61 - National Company Law Tribunal Rules, 2016 - Rules 11, 15, 48(2), 153 - Limitation Act, 1963 - Section 5 - Restoration of petition dismissed for non-prosecution - Petition under Section 9 dismissed for repeated non-appearance; restoration application filed after 111 days without separate delay condonation application, attributing delay to counsel's failure to inform during COVID-19 period - Rule 48(2) mandates restoration application within 30 days with sufficient cause for non-appearance - Inherent powers under Rule 11 or extension under Rule 15 cannot override express 30-day limit under Rule 48(2) - 'Inherent powers' exercisable only absent express provisions; cannot contravene statutory framework especially in time-bound insolvency proceedings - Counsel's negligence not sufficient cause where litigant not vigilant; liberal approach to condonation inapplicable to gross negligence or inaction - No sufficient cause shown for delay beyond 30 days; restoration rightly rejected. (Paras 40-47, 67-68)

(B) Insolvency Proceedings - Time-sensitivity - Strict adherence to procedural timelines essential; litigant cannot claim exemption due to counsel's lapse without demonstrating diligence - Substantial justice yields to statutory discipline where expedition paramount. (Paras 44-45, 55, 63-64)

Facts of the case:
Operational creditor's petition under Section 9 dismissed for non-prosecution after multiple non-appearances over six months. Restoration application filed five months later under Rule 11, citing counsel's non-communication during COVID-19. Tribunal rejected for delay beyond 30 days under Rule 48(2) sans condonation application and insufficient cause.

Findings of Court:
No infirmity in rejection; sufficient cause absent for condoning 111-day delay; express Rule 48(2) prevails over inherent powers.

Issues: Whether restoration permissible beyond 30 days under Rule 48(2) without formal condonation application on grounds of counsel's negligence; scope of inherent powers vis-à-vis express procedural rules in insolvency.

Ratio Decidendi: Rule 48(2)'s 30-day limit mandatory; inherent powers (Rule 11/15) cannot bypass it per Supreme Court precedents; counsel lapse insufficient sans litigant vigilance in time-bound proceedings.

Result: Appeal dismissed.

Table of Content
1. background of section 9 petition dismissal for non-prosecution. (Para 1 , 2 , 3 , 29 , 30 , 36 , 40 , 66)
2. litigant not penalized for counsel's negligence. (Para 5 , 6 , 7 , 8 , 9 , 24 , 56 , 57)
3. no mandatory formal condonation application required. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 43 , 58)
4. length of delay immaterial if explanation bona fide. (Para 20 , 21 , 54)
5. strict 30-day limit under rule 48(2) nclt rules. (Para 31 , 32 , 33 , 34 , 35 , 44 , 45 , 47 , 48 , 49 , 50)
6. time-bound ibc proceedings demand procedural discipline. (Para 39 , 52 , 53 , 55 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 68)
7. inherent powers cannot override express provisions. (Para 41 , 42 , 46 , 67)
8. appeal dismissed for insufficient cause. (Para 69)

J U D G M E N T

(Hybrid Mode)

[Per: Arun Baroka, Member (Technical)]

The present Appeal is being filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 (“the Code”), challenging the judgment dated 11.12.2024 passed by the Hon’ble National Company Law Tribunal, Indore Bench, Madhya Pradesh (“Hon’ble NCLT”) in IA No. 195 (MP) of 2022 (“the Restoration Application”) in Company Petition (MP) CP (IB) No. 1 of 2020 (“the Petition”) wherein the Hon’ble NCLT has rejected the Appellant’s application seeking restoration of 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:

o 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.

o 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) CP (IB) No. 1 of 2020, and had taken all necessary steps from its end, including the provision of documents, instructions, and regular follow-up. The Appellant remained under the bona fide belief that the said counsel was prosecuting the matter diligently, especially as the counsel had been regularly appearing before the Hon’ble NCLT prior to the outbreak of COVID-19 and had communicated previous updates. After the outbreak of COVID-19, the functioning of the Hon’ble NCLT was severely restricted, and physical appearances were limited. During this period, the Appellant made repeated attempts to contact the counsel for updates, but no information was furnished regarding any dismissal or default in appearance. Appellant first came to know about the dismissal of the Petition only on 28.07.2022, while preparing a status report of pending cases, which clearly indicates the lack of communication from the side of the erstwhile counsel.

6. No litigant should suffer for the fault or omission of their advocate, especially when they have acted in good faith. In the present case, the Appellant had taken all reasonable steps to ensure representation and prosecution of his matter and cannot be held responsible for the nonappearance or default of counsel. Thus, the rejection of the restoration application on the ground of delay, without appreciating that there was no fault of the Appellant and without giving an opportunity to explain the circumstances, is perverse and suffers from non-application of mind.

7. A litigant who has entrusted hi

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2026 Supreme(Online)(NCLAT) 422

NATIONAL COMPANY LAW APPELLATE TRIBUNALArun Baroka, Member (Technical)V-Con Integrated Solutions Pvt. Ltd. – AppellantVersusShreeram Technology Services Pvt. Ltd. – RespondentCompany Appeal (AT) (Insolvency) No. 283 of 2025|IA No. 195 (MP) of 2022|Company Petition (MP) CP (IB) No. 1 of 2020

Inherent powers cannot override Rule 48(2)'s 30-day limit for restoring non-prosecuted petitions; counsel's negligence not sufficient cause absent litigant diligence in time-sensitive insolvency proceedings.

Cases Referred (5)