A Rs 20.72 crore electricity dues claim was thrown out because no lawyer turned up. The NCLAT has restored it, holding that a lawyer engaged by a statutory company cannot hand over the brief to a junior and stop appearing.
Thank you for reading this post, don't forget to subscribe!
New Delhi: Counsel engaged by a statutory company cannot hand over the brief to a junior and stop appearing, the National Company Law Appellate Tribunal (NCLAT) has held, restoring the company’s claim of over Rs 20.72 crore in electricity charges against a corporate debtor in insolvency [Eastern Power Distribution Company of Andhra Pradesh Limited v. Daulat].
In an order dated September 25, 2026, a bench of Justice Sharad Kumar Sharma (Judicial Member), Arun Baroka and Indevar Pandey (Technical Members) allowed the appeal.
What the NCLAT set aside
The NCLAT quashed the NCLT order dated November 13, 2025, recalled the dismissal order of November 8, 2023, allowed the restoration application (I.A. No. 1570 of 2024), and directed the NCLT to consider I.A. No. 1061 of 2021 on merits.
The duty to appear and pursue
Paragraph 25 of the order sets out the Tribunal’s view:
When a Counsel is engaged for matters of statutory companies like the Appellant…they cannot entrust the brief to junior Counsel. The engaged Counsel ‘has to ensure that he appears when the matter is taken up and has to pursue the matter himself/herself.’
Rather than ordinary negligence, the Tribunal saw the lawyer’s conduct as a deliberate and intentional act. Rule 39 of the Bar Council of India Rules, it noted, ordinarily bars an advocate from entering appearance in a case where another advocate already holds the vakalat, except with that advocate’s consent. Even so, it held, a litigant should not suffer where counsel abandons the brief because of a professional or fee dispute.
ALSO READ: Litigants Should Not be Penalised for Their Lawyers’ Negligence: Chhattisgarh High Court
How the claim was lost
The appellant is a distribution licensee that supplied electricity to a corporate debtor going through the corporate insolvency resolution process. Charges of Rs 20,72,84,722 accrued during the moratorium, and the company applied to the NCLT, Kolkata for payment. On November 8, 2023 that application was dismissed for non-prosecution because counsel did not appear.
The company’s restoration application came about seven months later, and the NCLT rejected it as time-barred under Rule 48 of the NCLT Rules, which sets a 30-day limit.
Before the NCLAT, the company said that the lawyer it had engaged delegated the matter to junior counsel without appearing himself, and that it learnt of the dismissal only later.
Why the order matters
The ruling places the professional duty to appear on the lawyer actually engaged, particularly for statutory bodies, and protects public sector litigants from losing large claims because of counsel’s default. It also clarifies that the 30-day restoration limit will not be applied mechanically against a litigant whose counsel deliberately abandoned the matter.
Case Title: Eastern Power Distribution Company of Andhra Pradesh Limited v. Daulat [Company Appeal (AT) (Insolvency) No. 347 of 2026]
Bench: Justice Sharad Kumar Sharma (Judicial Member), Arun Baroka and Indevar Pandey (Technical Members), NCLAT
Date of Order: September 25, 2026
Appearances: Senior Advocate Joy Saha with Advocates Sidhartha Sharma, Rishav Dutt and Aman Kataruka for the appellant; Advocates Shaunak Mitra and Riyanshu Agarwal for the respondent