Presence of Counsel in Record Counters Dismissal for Non-Prosecution Caused by Alleged Technical Glitches

The Appellant filed an application under Section 94 of the Insolvency and Bankruptcy Code (I&B Code) in 2023.

On 10.10.2025, the Adjudicating Authority dismissed the petition for non-prosecution, despite the Appellant’s counsel being logged in via Video Conferencing.

The Appellant filed a Restoration Application (No. 84 of 2025) within 30 days, asserting that a technical glitch prevented the counsel's voice from being heard.

The Adjudicating Authority rejected the restoration on 11.12.2025, noting there were no system-wide complaints from other stakeholders.

The Appellant subsequently approached the NCLAT, along with an application for condonation of a 6-day delay in filing the appeal.

1. Whether there was sufficient cause to condone the 6-day delay in filing the appeal.

2. Whether the Adjudicating Authority erred in rejecting the Restoration Application despite evidence of the counsel’s presence and a claim of technical glitch.

The court applied the principle of "sufficient cause" for condonation of delay under the Limitation Act and the procedural equity governing the restoration of applications dismissed for non-prosecution.

It specifically looked at Section 94 of the Insolvency and Bankruptcy Code, 2016.

The court relied on the principle that if a party is diligently prosecuting a case and is prevented from appearing due to technical issues beyond their control (e.g., VC glitches), a bona fide attempt at representation should be recognized to prevent a miscarriage of justice.

The Tribunal first found that sufficient cause existed to condone the 6-day delay in filing the appeal.

Regarding the merits, the NCLAT observed that the order dated 10.10.2025 actually recorded the presence of the Appellant’s counsel, which corroborated the Appellant's claim that they were logged in.

The Tribunal reasoned that the Adjudicating Authority’s logic—denying restoration because no *other* stakeholders complained about the system—was flawed.

A localized technical glitch affecting one user’s audio is a valid "sufficient reason" for non-appearance.

Since the Appellant had been diligently pursuing the matter since 2023 and filed the restoration promptly within 30 days, the NCLAT determined that the late representation was due to factors beyond the Appellant's control.

It set aside the Adjudicating Authority’s order dated 11.12.2025 and the dismissal order dated 10.10.2025.

Restoration Application No. 84 of 2025 was allowed, and the Section 94 application was revived for fresh consideration on its merits.

The Appellant was granted liberty to present the order to the Adjudicating Authority to fix a new hearing date.