Delayed Litigant Cannot Seek Benefit Of Liberal Approach In Restoration Pleas: NCLT Kolkata

The National Company Law Tribunal (NCLT) at Kolkata has recently ruled that a party cannot seek restoration of a dismissed case by invoking a “liberal approach” if it has failed to act within the time prescribed by law.

Refusing to revive an application filed by Eastern Power Distribution Company of Andhra Pradesh Ltd, the tribunal observed that while courts generally take a lenient view in restoration matters, that indulgence cannot extend to litigants who have knowingly delayed pursuing their remedies.

“Though restoration application should be dealt with liberally as right to represent one's cause before the court is a fundamental one, but this does not mean that a litigant who has deliberately not taken steps for pursuing the remedy at the earliest should take advantage of liberal approach,” the tribunal said.

The ruling was delivered on November 13, 2025, by a coram of Judicial Member Labh Singh and Technical Member Rekha Kantilal Shah.

The dispute has its roots in the insolvency proceedings of Implex Metal & Ferro Alloys Ltd, which was admitted into the corporate insolvency resolution process in March 2018 on an application filed by State Bank of India. After no resolution plan could be approved, the company was ordered into liquidation in February 2019.

Eastern Power later approached the tribunal in December 2021, asking that an amount of Rs 20.72 crore be treated as CIRP costs for the electricity it had supplied to the corporate debtor during the insolvency proceedings.

The case, however, simply did not move forward. On multiple dates, no one appeared for Eastern Power, and the application was ultimately dismissed for default on November 7, 2023.

In July 2024, Eastern Power came back to the tribunal seeking restoration of its application. It put the blame on its previous advocate, saying he had repeatedly remained absent and failed to take the necessary steps. The company also pointed out that it is a government-owned utility based in Visakhapatnam and that it had engaged a new counsel in March 2024 after obtaining a no‑objection certificate from the earlier lawyer.

The tribunal however rejected its arguments and observed that although restoration applications are dealt liberally to protect a party's right to be heard, such directions cannot be exercised where the litigant was aware of the dismissal but failed to file the application within the statutory period of thirty days from the dismissal date as per Rule 48(2) of the NCLT Rules.

The tribunal noted the application was dismissed on November 7, 2023 and the company had failed to file it before December 7, 2023.

Concluding that no sufficient cause had been shown to condone the delay, the tribunal dismissed the application.

The Bench acknowledged that restoration applications are usually viewed liberally so that parties are not shut out without a hearing. At the same time, it stressed that this discretion cannot be stretched to cover situations where the litigant knew about the dismissal but still did not act within the prescribed time.

Holding that there was no “sufficient explanation” for the delay, the tribunal declined to condone it and dismissed the restoration application.