2021 Supreme(SC) 621

SUPREME COURT OF INDIA
Dhananjaya Y Chandrachud, Vikram Nath, BV Nagarathna, JJ.
V Nagarajan – Appellant
Versus
SKS Ispat and Power Ltd. & Ors. – Respondents
Civil Appeal No. 3327 of 2020
Decided On : 22-10-2021

IMPORTANT POINTS
(1) Appeal is a creature of statute – There is a fundamental distinction between right to file a suit and right to file an appeal.
(2) Appeal against order passed in miscellaneous application in a liquidation proceeding – Litigant has to file its appeal within thirty days, which can be extended up to a period of fifteen days, and no more, upon showing sufficient cause.
(3) A person wishing to file an appeal is expected to file an application for a certified copy before expiry of limitation period, upon which time requisite for obtaining a copy is to be excluded – However, time taken by court to prepare decree or order before an application for a copy is made cannot be excluded.

Headnote:

(A) Insolvency and Bankruptcy Code 2016 – Sections 61(1) and 62 read with Sections 238 and 238-A – Limitation Act, 1963 – Section 29(2) – Appeal against order passed in miscellaneous application in a liquidation proceeding – Time-barred appeal – IBC is a complete code – It has overriding effect – Appeal is a creature of statute – There is a fundamental distinction between right to file a suit and right to file an appeal – In terms of Section 9 of Code of Civil Procedure, 1908, there is an inherent right to bring a suit of a civil nature, unless suit is barred by statute – On other hand, appeal is a creature of statute and must have clear authority of law – In a field which is not covered by a special law which invests NCLT with jurisdiction, general principle for computation of limitation for filing appeal against order of NCLT is governed by statutory mandate of Section 420(3) of Companies Act read with Rule 50 of NCLT Rules, which enables a party to compute limitation from date of receipt of statutorily mandated free certified copy, without having to file its own application – However, statutory mandate of a free copy is not to enable litigants to take two bites at apple where they could compute limitation from either when certified copy is received on litigant’s application or received as a free copy from registry, whichever is later. (Paras 9, 11 and 14)

(B) Insolvency and Bankruptcy Code 2016 – Sections 61(1) and 62 read with Sections 238 and 238-A – Limitation Act, 1963 – Section 12 – Appeal – Limitation – Power to condone delay is tightly circumscribed and conditional upon showing sufficient cause, even within period of delay which is capable of being condoned – IBC is a watershed legislation which seeks to overhaul previous bankruptcy regime which was afflicted by delays and indefinite legal proceedings – IBC sought to structure and streamline entire process of insolvency, right from initiation of insolvency to liquidation, as a one-stop mechanism – IBC, as a prescriptive mechanism, affecting rights of stakeholders who are not necessarily parties to proceedings, mandates diligence on part of applicants who are aggrieved by outcome of their litigation – An appeal, if considered necessary and expedient by an aggrieved party, is expected to be filed forthwith without awaiting a free copy which may be received at an indefinite stage – Omission of words “from the date on which the order is made available” for the purposes of computation of limitation in Section 61(2) of IBC, is a consistent signal of intention of legislature to nudge parties to be proactive and facilitate timely resolution – It cannot be said that parties can automatically dispense with their obligation to apply for and obtain a certified copy for filing an appeal – Any delay in receipt of a certified copy, once an application has been filed, have been envisaged by legislature and duly excluded to not cause any prejudice to a litigant’s right to appeal – It is not open to a person aggrieved by an order under IBC to await receipt of a free certified copy under Section 420(3) of Companies Act 2013 read with Rule 50 of NCLT and prevent limitation from running – Accepting such a construction will upset timely framework of IBC – Litigant has to file its appeal within thirty days, which can be extended up to a period of fifteen days, and no more, upon showing sufficient cause. (Paras 16, 17, 18 and 21)

(C) Limitation Act, 1963 – Section 12 – Exclusion of period of limitation – Import of Section 12 of Limitation Act and its explanation is to assign responsibility of applying for a certified copy of order on a party – A person wishing to file an appeal is expected to file an application for a certified copy before expiry of limitation period, upon which time requisite for obtaining a copy is to be excluded – However, time taken by court to prepare decree or order before an application for a copy is made cannot be excluded – If no application for a certified copy has been made, no exclusion can ensue – Act of filing an application for a certified copy is not just a technical requirement for computation of limitation but also an indication of diligence of aggrieved party in pursuing litigation in a timely fashion. (Para 19)

Facts of the case:

Present appeal arises under Section 62 of the Insolvency and Bankruptcy Code 2016 from the judgement of the National Company Law Appellate Tribunal, Delhi2 dated 13 July 2020. The NCLAT dismissed the appeal as barred by limitation. The appellant had filed an appeal against National Company Law Tribunal, Chennai’s order dated 31 December 20195 which had dismissed appellant’s miscellaneous application in a liquidation proceeding, seeking interim relief against the invocation of a bank guarantee by Respondent No. 10 against the Corporate Debtor. Only submissions on the aspect of limitation have been pressed. The finding of this Court is limited to a determination on whether the appeal before the NCLAT under Section 61(1) of IBC was barred by limitation.

Findings of Court:

Appellant was present before the NCLT on 31 December 2019 when interim relief was denied and the miscellaneous application was dismissed. The appellant has demonstrated no effort on his part to secure a certified copy of said order and has relied on the date of the uploading of the order (12 March 2020) on the website. The period of limitation for filing an appeal under Section 61(1) against the order of the NCLT dated 31 December 2019, expired on 30 January 2020 in view of the thirty-day period prescribed under Section 61(2). Any scope for a condonation of delay expired on 14 February 2020, in view of outer limit of fifteen days prescribed under the proviso to Section 61(2).

Result : Appeal dismissed.