Summary
Appeals to the NCLAT against two NCLT orders of 20.07.2023 were filed on 28.08.2023 without any application for condonation of delay, with an assertion that they were within time, and the appellant had never applied for certified copies. The Supreme Court upheld the NCLAT's refusal to condone the delay, holding that limitation under Section 61(2) IBC runs from the date of pronouncement, that the 15-day extension under the proviso is strictly circumscribed and requires sufficient cause, that the benefit of Section 12(2) of the Limitation Act for the time taken to obtain a certified copy is available only where a copy was applied for, and that the mandatory requirement of Rule 22(2) of the NCLAT Rules to annex a certified copy cannot be dispensed with as of right.
Issues
- From which date does limitation for an appeal under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 begin to run: the date of pronouncement of the NCLT order or the date the order is made available to the party.
- Whether the time taken to prepare a certified copy can be excluded under Section 12(2) of the Limitation Act, 1963 where the appellant never applied for a certified copy.
- Whether the NCLAT erred in dismissing the applications for condonation of delay, and the appeals, where the appeal memo wrongly asserted that the appeals were within time and a contrary stand was taken in the later condonation applications.
- Whether an appellant can claim exemption from annexing a certified copy under Rule 22(2) of the NCLAT Rules as a matter of right.
Provisions considered
- Section 61(2) and proviso, Insolvency and Bankruptcy Code, 2016An appeal to the NCLAT must be filed within 30 days; the proviso permits a further period not exceeding 15 days only on the NCLAT's satisfaction that there was sufficient cause. The Court held the extension must be strictly construed and is not a matter of right; the date of pronouncement is excluded and limitation ran from 21.07.2023, so appeals filed on 28.08.2023 were beyond 30 days and no sufficient cause was shown. (¶¶ 12, 13, 14, 18, 26, 28)
- Section 12(2), Limitation Act, 1963The time requisite for obtaining a copy of the order appealed from is excluded, but following V. Nagarajan the exclusion is available only from the date an application for a certified copy is made until the copy is ready; time taken by the court to prepare the order before any application cannot be excluded. Since the appellant never applied for a certified copy, no exclusion was available for the free copy made ready on 01.08.2023. (¶¶ 19, 25, 27)
- Rules 22(2) and 50, National Company Law Appellate Tribunal Rules, 2016Rule 22(2) mandates that an appeal be accompanied by a certified copy of the impugned order and Rule 50 requires the Registry to send a free certified copy of the final order; the right to a free copy does not obviate the obligation to apply for a certified copy, and frequent grant of waivers confers no automatic right to dispensation. (¶¶ 16, 19, 20, 26, 27)
- Sections 420(3) and 421(3), Companies Act, 2013Unlike Section 421(3) of the Companies Act, which starts limitation when a copy of the order is made available, Section 61 IBC contains no such condition; following V. Nagarajan the Code has primacy and the time-bound IBC framework cannot be upset by letting litigants await certified copies. (¶¶ 17, 19)
Held
- Section 61(2) IBC fixes 30 days for an appeal to the NCLAT, extendable under the proviso by at most 15 days on the NCLAT being satisfied of sufficient cause; the extension is cloaked in restrictions, is not claimable as of right, and must be strictly, not liberally, construed, reflecting the time-bound legislative scheme. Following National Spot Exchange, delay beyond the 15 days cannot be condoned even under Article 142. (¶¶ 14, 18, 22)
- Limitation under Section 61 IBC commences on the date the order is pronounced, not when it is made available to the party; where no order is pronounced at the close of hearing, it runs from the date the order is pronounced or uploaded by the Registry (Sanjay Pandurang Kalate). Section 61 IBC, unlike Section 421(3) of the Companies Act, 2013, does not postpone limitation to receipt of a certified copy (V. Nagarajan). (¶¶ 17, 23, 24, 25)
- An appellant must apply for and obtain a certified copy as Rule 22(2) of the NCLAT Rules requires; the time taken by the Tribunal to prepare the order before any application for a copy cannot be excluded under Section 12 of the Limitation Act, and the entitlement to a free copy under Section 420(3) of the Companies Act does not displace the obligation to seek a certified copy. Exemption from filing a certified copy is not available as of right. (¶¶ 19, 20, 21, 25, 27)
- On the facts, the appeals filed on 28.08.2023 against orders pronounced on 20.07.2023 were beyond 30 days; the second appeal, filed without any certified copy and without any application for one, was liable to be dismissed on that score alone; the first appeal, filed with the free copy, could not claim exclusion of the ten days taken to prepare it since no certified copy was applied for; and the condonation application disclosed no reason amounting to sufficient cause. The NCLAT's further grounds, that the appeal memo falsely asserted the appeals were within time and that a contrary stand was taken in the condonation applications, were borne out by the record. (¶¶ 5, 26, 27, 28, 29)
Result
Appeals dismissed; NCLAT order dated 18.01.2024 dismissing the applications for condonation of delay and the appeals upheld. No order as to costs; pending applications disposed of.