NCLAT Restores Company Petition Because Delay Was Not Solely Petitioner’s Fault

PG Holiday Inn Pvt. Ltd. Vs Bencomar Hotels (Goa) Pvt. Ltd. & Ors. (NCLAT Delhi)

PG Holiday Inn Pvt. Ltd. v. Bencomar Hotels (Goa) Pvt. Ltd. and Ors. – Restoration of Company Petition Dismissed for Want of Prosecution and Non-Filing of Vakalatnama upon Conditional Payment of Costs

National Company Law Tribunal Rules – Vakalatnama – Restoration application – Dismissal for want of prosecution. The appeal arose from dismissal of a restoration application on the ground that the company petition had remained pending since 2018, compliances were not done, vakalatnama was not filed, and the petitioner’s absence was not bona fide. Held that the record showed that earlier counsel had withdrawn vakalatnama, subsequent adjournments were stated to have occurred on account of paucity of time and technical glitch, and on 18-2-2026 counsel had appeared through video conference seeking accommodation to place vakalatnama on record. Since pleadings were complete and the matter was ripe for final arguments, the appellant ought to be given one more opportunity to argue the case on merits. Accordingly, the impugned order dated 18-3-2026 and the order dated 18-2-2026 were set aside, the restoration application was allowed, and the appeal was allowed subject to payment of costs of Rs. 50,000 to the respondents, with a request to the NCLT to hear the matter expeditiously, preferably within three months.

Facts of the Case

• The appeal was filed against the order dated 18.03.2026 passed by the NCLT, Mumbai Bench, by which Restoration Application No. 10 of 2026 was dismissed.
• The NCLT had dismissed the restoration application on the ground that the company petition had been pending since 2018 and compliances had not been completed even after about 8 years. It also recorded that non-submission of vakalatnama on or before 18.02.2026 and the petitioner’s absence were not bona fide.
• The appellant referred to the order dated 10.07.2024, where the erstwhile counsel for the appellant appeared, stated that no instructions had been received from the appellant, and was allowed to withdraw the vakalatnama. The matter was then adjourned to 18.09.2024. (p2)
• On 18.09.2024, the matter was adjourned to 20.11.2024, and thereafter various dates were given, allegedly due to paucity of time and technical glitch.
• On 18.02.2026, Ms. Neha D. Souza, Advocate, appeared through video conference and sought accommodation to place her vakalatnama on record, but was not permitted due to the past conduct of the appellant, and the company petition was dismissed for want of prosecution. The same reasons were reflected in the order dated 18.03.2026 dismissing the restoration application.

Contentions of the Parties

• The appellant submitted that it had never taken adjournments as recorded in the impugned order.
• The appellant contended that on numerous dates the matter was adjourned by the NCLT itself due to paucity of time or technical issues. (p4)
• The appellant submitted that despite appearance of Ms. Neha D. Souza, Advocate, through video conference on 18.02.2026 and her request for time to file vakalatnama, the petition was dismissed for want of prosecution.
• The appellant further argued that Ms. Neha D. Souza had obtained the vakalatnama but required permission to file it, and that the delay could not be attributed to the appellant alone because many adjournments were due to paucity of time.

Issues

• Whether the dismissal of the restoration application on the basis of non-compliance, non-filing of vakalatnama, and absence of the petitioner was justified.
• Whether the appellant should be granted a further opportunity to prosecute and argue the company petition on merits in the circumstances stated before the Appellate Tribunal.

Decision

A. Background of dismissal and restoration

• The Appellate Tribunal noted that the restoration application had been dismissed because the company petition was pending since 2018, compliances had not been done even after about 8 years, vakalatnama had not been submitted on or before 18.02.2026, and the petitioner’s absence was treated as not bona fide.
• It also noted that on 18.02.2026 counsel had appeared through video conference and sought accommodation to place vakalatnama on record, but such request was not permitted owing to the appellant’s past conduct, leading to dismissal of the company petition for want of prosecution; the same reasoning was adopted in the impugned order on restoration.

B. Consideration of the appellant’s explanation

• The Appellate Tribunal recorded the appellant’s reliance on the previous orders showing that on 10.07.2024 the earlier counsel withdrew vakalatnama on the ground of lack of instructions, after which the matter was adjourned to 18.09.2024.
• It further recorded that on 18.09.2024 the matter was adjourned to 20.11.2024 and that on various subsequent dates adjournments were allegedly occasioned by paucity of time and technical glitch.
• The Tribunal also recorded the appellant’s submission that it had not itself sought the adjournments attributed to it in the impugned order and that delay could not be attributed to the appellant alone, since many adjournments were caused by the Tribunal’s own inability to take up the matter.

C. Grant of one more opportunity on merits

• Upon considering the submissions, the Appellate Tribunal held that it would be appropriate to give the appellant one more opportunity to argue the case on merits.
• The Tribunal specifically noted the information placed before it that pleadings in the matter had been completed and the matter was ripe for final arguments.

D. Operative directions and conditions

• For the reasons stated, the Appellate Tribunal set aside the impugned order dated 18.03.2026 and allowed Restoration Application No. 10 of 2026.
• Consequently, the order dated 18.02.2026 dismissing the company petition for want of prosecution was also set aside.
• The NCLT was requested to hear the matter on merits as expeditiously as possible, preferably within three months, and the Tribunal expressed hope that both parties would not take unnecessary adjournments.
• The appeal was allowed subject to payment of costs of Rs. 50,000 to the respondents within one week from the date of the order, and pending applications, if any, were closed.

Conclusion

The Appellate Tribunal concluded that, in the circumstances placed before it, the appellant should be afforded one further opportunity to have the company petition heard on merits, especially when pleadings were complete and the matter was ready for final arguments. The dismissal orders were therefore interfered with and the proceedings were restored, subject to costs.

Disposition

The appeal was allowed. The impugned order dated 18.03.2026 dismissing Restoration Application No. 10 of 2026 was set aside, the restoration application was allowed, and the order dated 18.02.2026 was also set aside. The NCLT was requested to hear the matter on merits expeditiously, preferably within three months. The relief was made subject to payment of costs of Rs. 50,000 to the respondents within one week. Pending applications, if any, were closed.”

FULL TEXT OF THE NCLAT JUDGMENT/ORDER

This appeal is filed against an impugned order dated 18.03.2026 passed by the Ld. NCLT, Mumbai Bench wherein Restoration Application No. 10 of 2026 was dismissed on the ground the company petition was pending since 2018 and compliances were not done even after a lapse of about 8 years. It was also recorded not only the non-submission of Vakalatnama on or before 18.02.2026 was an issue but petitioner’s absence was also not bonafide.

2. The Ld. Counsel for the Appellant, however, has referred to various orders viz 10.07.2024 wherein the erstwhile ld. counsel(s) for the Appellant appeared and withdrew Vakalatnama, as had not received any instructions from the Appellant and thus, was allowed to withdraw Vakalatnama and the matter was adjourned to 18.09.2024. Further on 18.09.2024, the matter was adjourned to 20.11.2024 and then various dates were given, allegedly, due to paucity of time and technical glitch.

3. On 18.02.2026, Ms. Neha D. Souza, Adv. appeared through VC and sought accommodation to place on record her Vakalatnama, but was not permitted to do so due to past conduct of the appellant and as such the company petition was dismissed for want of prosecution. The same reasons are given in the impugned order dated 18.03.2026 dismissing the restoration application.

4. It is the submission of the Ld. Counsel for the Appellant, the Appellant never took adjournments as held in the impugned order. It is alleged the matter was adjourned on numerous dates by the Ld. NCLT itself either due to paucity of time or on technical issue and when on 18.02.2026 the matter came up before Ld. NCLT, the petition was dismissed for want of prosecution, despite appearance of Adv. Neha D. Souza through VC and requested for some more time to file her Vakalatnama.

5. It is the submission of the Appellant Ms. Neha D. Souza, Adv. though had obtained the Vakalatnama but needed permission to file the same. It is argued the delay cannot be attributed to the conduct of the appellant alone as on numerous dates the matter was adjourned due to paucity of time.

6. Considering the submissions made, it would be appropriate if the Appellant is given one more chance to argue the case on merits since we are informed, the pleadings in the present matter have since been completed and the matter is ripe for final argument.

7. Thus, for reasons aforesaid, the impugned order dated 18.03.2026 is set aside and thus Restoration Application No. 10/2026 is hereby allowed. Consequently, the order dated 18.02.2026 is set aside. The Ld. NCLT is requested to hear the matter on merit, as expeditiously as possible, preferably within three months. We hope both the parties shall not take unnecessary adjournments.

8. The appeal stands allowed, subject to payment of cost of Rs. 50,000/- payable to the Respondents, within a week from today. Pending applications, if any, are also closed.