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2024 Supreme(Online)(NCLT) 1683
NATIONAL COMPANY LAW TRIBUNAL
HON’BLE MR. HARNAM SINGH THAKUR, MEMBER (JUDICIAL), HON’BLE MR. ASHISH VERMA, MEMBER (TECHNICAL)
Bharat Chugh – Appellant
Versus
M/s Arora Iron & Steel Rolling Mills Pvt. Ltd. – Respondent
RST. A(IBC) 9/(CH)/2024 | CP(IB) No. 299/PB/2022
For the Applicant: Mr. Jatin Bansal, Ms Keerti Sandhu
For the Respondent: Dr. Rajansh Thukral, Mr. Sidharth Thukral
Restoration applications under Rule 48 of NCLT Rules are not maintainable when a petition is dismissed for non-prosecution and non-compliance with tribunal orders, emphasizing the court's lack of jurisdiction to review final orders.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Application for initiation of corporate insolvency resolution process - Dismissal for non-prosecution and non-compliance of tribunal orders - Restoration application filed, but found non-maintainable as the dismissal order was not due to default - No jurisdiction to review own order under Rule 48 of NCLT Rules, 2016 - RST.A dismissed as it didn’t meet the required provisions (Paras 6-11).
(B) Legal Standing - Counsel cannot substitute client in petition filing - Requirement of affidavit by the applicant, not by counsel - Misconduct and untrustworthiness in documents provided raised concerns.
Facts of the case:
The petitioner’s application CP (IB) No. 299/CH/2022 was dismissed for non-appearance and non-compliance of orders. The applicant claimed medical reasons for non-appearance, but the court found the excuse insufficient and indicated a history of non-compliance.
Findings of Court:
The dismissal for non-prosecution due to the counsel’s absence was validated. The essential condition under Rule 48 was not satisfied since the petition was dismissed for grounds explicitly outside of mere absence. Restoration was denied based on procedural failings and overall merits of the case.
Issues: Whether the dismissal of the CP was maintainable under Rule 48 of NCLT Rules, specifically concerning non-prosecution and the requirement for personal deposition by the applicant.
Ratio Decidendi: The court reaffirmed its jurisdictional limits, emphasizing compliance expectations and the lack of merit in restoration claims that do not meet rule provisions. The applicant’s purported medical exigency was inadequate justification for procedural failings.
Result: RST.A.(IBC)/9(CH)2024 dismissed.
| Table of Content |
|---|
| 1. dismissal of application for non-prosecution due to non-compliance with tribunal orders. (Para 2 , 6) |
| 2. arguments raised for restoration that relied on medical exigencies and procedural breaches. (Para 3 , 4) |
| 3. court's observations highlighted the lack of justification for counsel's absence and the inadequacy of medical claims. (Para 5 , 8 , 10) |
| 4. court reaffirmed the limits of its jurisdiction and compliance requirements under rule 48. (Para 7 , 9) |
| 5. final dismissal of the restoration application. (Para 11) |
ORDER
This Restoration Application (hereinafter referred to as the “RST.A. (IBC)/9(CH)2024” has been filed by the applicant under Rule 48(2) read with Rule 11 of NCLT Rules , 2016 (hereinafter referred to as the “Applicant”) with the following prayer:
(a) Allow the present application and pass an order restoring the captioned matter i.e. CP (IB) NO. 299/CH/2022 in terms of Rule 48(2) of the NCLT Rules , 2016;
(b) Set aside the order dated 06.03.2022 passed by this Hon'ble Tribunal in CP (IB) NO. 299/CH/2022 along with setting aside any cost imposed upon the applicant; and (c) Pass any other or further order as this Hon'ble Tribunal· may deem fit and proper in the interest of justice, equity and good conscience.
FACTS OF THE CASE
2. The brief facts, of the case are as below:
(i) The applicant had filed Petition No. CP (IB) NO. 299/CH/2022 under section 7 of IBC which was dismissed by this Bench in terms of order dated 06.03.2024 on account of non-prosecution as well as non- compliance of the direction this tribunal, and hence the following order was passed:
“It is seen that on the last date of hearing i.e. 07.02.2024, it was clearly stated that no further adjournment will be allowed on any ground and a cost of Rs.25,000/- (vide orders dated 07.02.2024 & 21.11.2023) was imposed twice upon the Ld. Counsel for the petitioner and also directed to appear for today’s hearing. But even today, neither she is present nor a cost of Rs.25,000/- (vide orders dated 07.02.2024 & 21.11.2023) imposed upon the Ld. Counsel for the petitioner has been deposited. Keeping in view the facts and circumstances of the present case, CP (IB) No. 299/Chd/Pb/2022 stands dismissed for non-prosecution as well as for non- compliance of the Court’s order and a special cost of Rs.50,000/- has been imposed upon the petitioner for wasting Court time. File be consigned to the record room.”
(ii) A reply has been filed by the respondents vide diary no. 01219/2 dated 06.05.2024 in response to the present Restoration Application. The applicant filed an affidavit in compliance of order dated 05.07.2024 and placed on record copy of documents in compliance with order dated 15.07.2024. The respondent filed their written submissions vide diary no. 01219/5 dated 07.10.2024.
(iii) On taking up the application, this Court issued the following directions in terms of order dated 15.07.2024 “Vakalatnama has been filed by the learned counsel for the petitioner vide Diary No. 02560/ 6 dated 08.05.2023. It is seen that the order dated 06.03.2024 was passed and the CP (IB) No. 299/Chd/Ph/2022 was dismissed for non-prosecution as well as for the non-compliance of the order with a cost of Rs. 50, 000/. It is observed that the said cost has not deposited so far, therefore, notice cannot be issued to the other side. Therefore, the learned counsel for the applicant is directed to deposit a sum of Rs. 50,000/- in the Prime Minister National Reliefs Fund within ten days, failing which, the RST.A(IBC)/ 9(CH)2024 will be dismissed straightaway. Last opportunity is granted.
List on 22.08.2024.”
(iv) The applicant challenged the aforesaid order dated 15.07.2024 before Hon’ble NCLAT in appeal no. Company Appeal (AT) (Insolvency) No.1435 of 2024 which was disposed of by Hon’ble NCLAT in terms of order dated 29.07.2024 with the following directions:
“8. We are of the view that by virtue of the earlier orders cost has been imposed which was to be deposited before his application is con
