Summary
The NCLAT condoned the delay in an appeal under Section 61 IBC against approval of a resolution plan by treating the 30-day period as expiring on the Monday after a Sunday. The Court held that limitation runs from the date the NCLT pronounced its order, that Section 4 of the Limitation Act extends only the prescribed 30-day period and not the 15-day condonable period, and that the NCLAT has no power to condone delay beyond 45 days; the appeal filed on the 46th and 47th day was time-barred and the condonation order was set aside.
Issues
- Whether the appeal under Section 61 IBC was filed within the 30-day limitation period together with the 15-day condonable period under the proviso to Section 61(2).
- Whether limitation under Section 61(2) IBC runs from the date of pronouncement of the NCLT order or from the date on which a non-party learnt of it through stock-exchange disclosure.
- Whether the benefit of Section 4 of the Limitation Act, 1963 and Rule 3 of the NCLAT Rules, 2016 is available when the condonable period, as distinct from the prescribed period, expires on a holiday.
- Whether the NCLAT may condone delay beyond the 45-day outer limit under Section 61(2) IBC.
Provisions considered
- Section 61(2) and proviso, Insolvency and Bankruptcy Code, 2016An appeal to the NCLAT must be filed within thirty days; the NCLAT may allow filing after that period on sufficient cause, but the extension cannot exceed fifteen days. The total permissible period is therefore 45 days, and the respondent's appeal, filed on the 46th/47th day from pronouncement, was beyond it. (¶¶ 8, 9, 10.4, 11)
- Section 238A, Insolvency and Bankruptcy Code, 2016Makes the Limitation Act, 1963 applicable, as far as may be, to proceedings and appeals before the NCLT and NCLAT. (¶ 10)
- Section 2(j), Limitation Act, 1963'Prescribed period' means the period of limitation computed under the Act; a further period during which a court or tribunal has discretion to allow a proceeding is not the prescribed period (Assam Urban; Sagufa Ahmed). (¶¶ 10.1, 10.2)
- Section 4, Limitation Act, 1963Where the prescribed period expires on a day the court is closed, the proceeding may be filed on the day it reopens. The benefit applies only to the prescribed period of limitation and not to the period extendable in the court's discretion; here the 30 days expired on a working Saturday and the appeal was in any event beyond the 45-day limit. (¶¶ 10.1, 10.2, 10.4)
- Rule 3, National Company Law Appellate Tribunal Rules, 2016Excludes the day from which a period is reckoned and any closing day on which the period ends; held to have no application for the same reason that Section 4 of the Limitation Act did not. (¶¶ 10.1, 10.4)
- Section 12(2), Limitation Act, 1963Noted, following V. Nagarajan and A. Rajendra, that an appellant who applies for a certified copy may exclude the time taken to obtain it, but limitation itself starts running from pronouncement. (¶¶ 10.3, 10.3.1)
Held
- Under Section 61(2) IBC the total permissible period for an appeal to the NCLAT is 45 days: the 30-day prescribed period plus a further 15 days that may be condoned on sufficient cause. (¶ 8)
- Limitation under Section 61(2) IBC commences from the date of pronouncement of the NCLT order, not from the date the order is received or the aggrieved person becomes aware of it (V. Nagarajan; Sanjay Pandurang Kalate; A. Rajendra). Here the corporate debtor informed the stock exchanges within 30 minutes of pronouncement on 07.04.2022, so the 30 days expired on 07.05.2022, which was in any case a working Saturday for the NCLAT registry. (¶¶ 10.3, 10.3.1, 10.4)
- The benefit of Section 4 of the Limitation Act and Rule 3 of the NCLAT Rules is available only when the 'prescribed period' of limitation expires on a day the court is closed; it is not available for the further period which the court or tribunal may extend in its discretion (Assam Urban; Sagufa Ahmed; Bhimashankar; My Preferred Transformation). (¶¶ 10.1, 10.2, 10.4)
- The appeal e-filed on 23.05.2022 and physically filed on 24.05.2022 was beyond both the 30-day prescribed period and the 15-day condonable period, so the NCLAT's order condoning the delay was ultra vires. (¶¶ 10.4, 12)
- The NCLAT, being a creature of statute, has no inherent jurisdiction to extend time on equitable grounds; once the 30 plus 15 days expire it has no jurisdiction to entertain the appeal whatever the reason for the delay (Kalpraj Dharamshi). Time is of the essence in statutory appeals and even a single day's delay is fatal where the statute does not permit its condonation. (¶¶ 11, 11.1, 11.2, 13)
Result
Appeal allowed; order of the NCLAT dated 14.12.2022 in I.A. No. 1667 of 2022 in CA (AT) (Insolvency) No. 615 of 2022 condoning the delay set aside; no order as to costs; connected applications closed.