The Supreme Court held that the expression ‘sufficient cause’ within the meaning of section 5 of the Act should receive a liberal construction so as to advance substantial justice when no negligence or inaction or want of bona fide is imputable to party. In a particular case whether explanation furnished would constitute ‘sufficient cause’ or not will depend upon facts of each case. There cannot be a strait-jacket formula for accepting or rejecting explanation furnished for the delay caused in taking steps. Acceptance of explanation furnished should be ‘the rule and refusal, an exception, more so, when no negligence or inaction or want of bona fide can be imputed to the defaulting party.

While considering the matter, courts have to strike a balance between resultant effect of the order it is going to pass upon the parties either way.