Litigant cannot suffer for counsel’s deliberate non-appearance; NCLAT restores ₹20.72-crore electricity dues claim

The Appellant, an electricity distribution licensee, supplied electricity to Impex Metal & Ferro Alloys Ltd., the Corporate Debtor, during its CIRP.

The Corporate Debtor consumed electricity between 1 March 2018 and 24 April 2019, resulting in outstanding consumption charges of ₹20,72,84,722, which the Appellant claimed as CIRP costs under the Insolvency and Bankruptcy Code, 2016.

The Appellant filed I.A. No. 1061 of 2021 seeking payment of the outstanding electricity charges. That application was dismissed for non-prosecution on 8 November 2023 because the Appellant’s counsel was absent.

The Appellant subsequently filed I.A. No. 1570 of 2024 seeking recall/restoration of I.A. No. 1061 of 2021.

The NCLT rejected the restoration application on 13 November 2025, holding that it was filed beyond the thirty-day period contemplated under Rule 48(2) of the NCLT Rules, 2016.

Whether the Appellant’s restoration application could be rejected solely because it was filed beyond the thirty-day period under Rule 48(2) of the NCLT Rules, 2016, despite the explanation that the delay resulted from the earlier counsel’s deliberate non-appearance and failure to provide an NOC?

Whether a litigant should be made to suffer for the deliberate or negligent non-appearance of its counsel, resulting in dismissal of its application for non-prosecution?

Whether the Appellant was legally required to obtain the previous counsel’s consent/NOC before engaging a new counsel, and whether the absence of such consent justified the delay in seeking restoration?

Whether I.A. No. 1061 of 2021, concerning electricity charges allegedly incurred during CIRP, should be restored for adjudication on merits?

The Court applied Section 14(2) and Section 14(2A) of the Insolvency and Bankruptcy Code, 2016, under which essential supplies and supplies necessary for preserving the Corporate Debtor as a going concern generally cannot be terminated during moratorium, subject to payment of post-commencement dues.

It considered Rule 48(2) of the NCLT Rules, 2016, concerning restoration of applications dismissed for non-prosecution, and held that the thirty-day period was not an absolute bar where the delay could be considered under Section 238A of the Code read with Section 5 of the Limitation Act, 1963.

Rule 39 of the Bar Council of India Rules requires a subsequent advocate to obtain the earlier advocate’s consent or seek the court’s permission before entering appearance where a vakalatnama is already on record.

Order III Rule 4 CPC was relied upon for the principle that a vakalatnama continues until determined by the client or advocate with the leave of the court.

The Court relied on Rafiq v. Munshilal, (1981) 2 SCC 788, for the principle that an innocent litigant should not suffer because of the advocate’s default.

The Court relied on Metalrod Pvt. Ltd. v. Harshit Finvest Pvt. Ltd., (2025) ibclaw.in 563, regarding the applicability of Article 137 and the Tribunal’s inherent powers in restoration matters.

The NCLAT held that the dismissal of I.A. No. 1061 of 2021 was not a decision on merits but a dismissal for non-prosecution resulting from counsel’s absence.

The record indicated that the earlier counsel had not personally appeared for several dates and had allegedly withdrawn from effectively pursuing the matter without informing the Appellant.

In these circumstances, the Appellant’s reliance on Rafiq was justified, since a litigant who has engaged counsel and entrusted the matter to him cannot ordinarily be expected to monitor every listing or compel counsel to appear.

The Court further held that the Appellant’s explanation regarding the delayed restoration was sufficient.

Rule 39 of the Bar Council of India Rules and Order III Rule 4 CPC created a practical impediment to immediately engaging new counsel without obtaining the earlier counsel’s consent or seeking leave of the Tribunal.

The delay therefore had to be assessed with reference to the circumstances, rather than mechanically applying Rule 48(2).

Section 238A, read with Section 5 of the Limitation Act, empowered the Tribunal to condone the delay where sufficient cause was shown, particularly because the underlying application had not been adjudicated on merits.

The Court concluded that the alleged deliberate conduct of the earlier counsel constituted sufficient cause and that the Appellant should not lose its substantive claim merely because of that conduct.

The NCLAT quashed the NCLT’s order dated 13 November 2025, recalled the order dated 8 November 2023 dismissing I.A. No. 1061 of 2021 for non-prosecution, and allowed I.A. No. 1570 of 2024.

I.A. No. 1061 of 2021 was directed to be considered by the NCLT on its own merits, including the Appellant’s claim for ₹20,72,84,722 towards electricity consumed during the CIRP.

All pending interlocutory applications were closed.