Presence of Counsel on Record and Technical Glitches Constitute Sufficient Cause for Restoring Applications Dismissed for Non-Prosecution

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 (NCLT) dismissed the petition for non-prosecution, recording that no one appeared for the Applicant.

The Appellant filed Restoration Application No. 84 of 2025 within 30 days, asserting that the counsel had logged in via virtual hearing but remained unheard due to a technical glitch—a fact supported by the counsel’s name appearing in the attendance record of the dismissal order.

On 11.12.2025, the NCLT rejected the restoration application, noting that no other stakeholders had reported system malfunctions that day.

The Appellant challenged this rejection and sought condonation of a 6-day delay in filing the present appeal.

The court applied the principle of "sufficient cause" for condonation of delay in filing appeals and the procedural standards for restoration of applications dismissed for non-prosecution.

It emphasized that a restoration application should be granted if a "bonafide attempt" to appear is demonstrated.

The court indirectly applied the principles of natural justice, ensuring a party is not penalized for technical glitches beyond their control.

The specific provisions of Section 94 of the Insolvency and Bankruptcy Code, 2016 were applied.

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

Regarding the merits, the NCLAT observed that while the NCLT recorded a lack of appearance, the dismissal order itself contradicted this by recording the counsel's name in the appearances.

The Tribunal held that the NCLT’s reasoning—that no other stakeholders complained of system issues—was an insufficient basis to reject the restoration.

Since the Appellant had been diligently prosecuting the case since 2023 and the non-appearance was due to a documented technical error (log-in established but audio failed), the Tribunal determined that the Appellant deserved an opportunity to be heard on the merits.

The order dated 11.12.2025 was set aside, and Restoration Application No. 84 of 2025 was allowed.

Consequently, the order dated 10.10.2025 dismissing the Section 94 petition for non-prosecution was set aside, and the original application was revived for fresh consideration by the Adjudicating Authority.

The Tribunal clarified it expressed no opinion on the merits of the Section 94 application.