Back
NCLAT Restores Icatalyst's Insolvency Petition, Says Counsel's Mistake Not to Bar Restoration
The has quashed an NCLT order that rejected a restoration application, ruling that a litigant cannot be made to suffer due to a counsel's in missing a hearing.
A bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Indevar Pandey allowed the appeal filed by , restoring its insolvency petition against (formerly known as ). The case highlights the interplay between the strict for restoration and the tribunal's to do justice.
The Backstory: A Mistaken Timing
Icatalyst had initiated proceedings under , before the , New Delhi Bench – IV. The petition was listed for hearing on . However, due to a misunderstanding over the bench's sitting time—the counsel noted a 2:30 PM sitting while the bench assembled earlier at 10:30 AM—the advocate was absent when the matter was called. The NCLT dismissed the petition for .
Icatalyst moved a restoration application on , explaining that the absence was neither deliberate nor intentional. The company also filed a delay-condonation application, supported by an affidavit and separate court fee. However, when the restoration application was listed on , the accompanying delay-condonation application had not been registered or placed before the tribunal. The NCLT, taking the view that the application was filed after considerable delay and without a formal condonation plea, rejected it.
The Core Dispute: Limitation vs.
Before the NCLAT, Icatalyst argued that the NCLT had erred in not considering the delay-condonation application that was filed alongside the restoration plea. The company contended that the failure to register that application should not be held against it.
The NCLAT examined , which governs restoration of petitions dismissed for default. The rule ordinarily requires an application to be filed within 30 days, but the appellate tribunal emphasised that this provision does not create an absolute bar for applications filed beyond that period.
" , which prescribes for 30 days of limitation, could also be condoned on a supporting application to be filed by the applicant seeking recall of the Order dismissing the company petition for ,"the bench observed.
The tribunal further held that Rule 48 must be read harmoniously with , which confers inherent powers on the tribunal to make orders necessary for meeting the . In this case, the appellant's explanation—that the counsel missed the hearing due to a preponed sitting—was found to be bonafide and unrebutted.
Key Observations: No Penalty for Counsel's Lapse
The NCLAT made several critical observations:
"If the application is not presented before the learned Tribunal for its consideration, the appellant cannot be made to suffer and that too on an aspect or the issue of limitation, which cannot be exclusively taken as to be the basis for rejecting the restoration application and that too, more importantly, when the absence is attributable to ."
The bench also reiterated the that a litigant should not suffer due to the counsel's :
"Even otherwise also, the law is well settled that none of the litigant is made to suffer due to on the part of the Counsel, to appear in the proceedings on an assigned date."
The Decision and Its Implications
The NCLAT quashed the NCLT's order and allowed the restoration application. The original company petition, , has been restored to its original number and is to be decided on its merits.
This ruling sends a clear message: while tribunals must enforce procedural timelines, they cannot do so mechanically when the underlying cause is a by counsel and the litigant has acted in good faith. The judgment reinforces that the under exists precisely to prevent such injustice.
