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SUPREME COURT OF INDIA
Dr. Dhananjaya Y. Chandrachud, CJI., J B Pardiwala, J.
Sanket Kumar Agarwal & Anr. – Appellants
Versus
Apg Logistics Private Limited – Respondent
Civil Appeal No. 748 of 2023
Decided On : 01-05-2023
LIMITATION - Insolvency and Bankruptcy Code - Section 62 - Summary of Acts and Sections: The court discussed Section 61(2) of the Insolvency and Bankruptcy Code, 2016, which prescribes a 30-day deadline for preferring an appeal against an order of the adjudicating authority, and the proviso allowing the appellate tribunal to condone a delay of up to 15 days. The court also referred to Section 238A, which provides for the application of the Limitation Act 1963 to appeals before the NCLAT, and the NCLAT Rules 2016, particularly Rule 3 and Rule 22, which deal with the computation of time period and the procedure for the institution of appeals. The court highlighted the conflicting administrative orders issued by the NCLAT regarding the computation of limitation for filing an appeal, emphasizing the importance of clarity and consistency in administrative guidance.
Fact of the Case:
The appellant filed an appeal under Section 62 of the Insolvency and Bankruptcy Code 2016 seeking the initiation of the Corporate Insolvency Resolution Process against the respondent. The appeal was dismissed by the NCLAT on the ground of limitation. The appellant argued that the appeal had been filed within the period of limitation from the date the order was made available in the public domain, while the respondent contended that the appeal was filed beyond the limitation period.
Finding of the Court:
The court found that the NCLAT had erroneously dismissed the appeal on the ground of limitation. It held that the appeal was instituted within the outer limit of 45 days, as provided by Section 61(2) of the IBC, and that the time taken by the court to provide a certified copy of the order should be excluded when determining the period of limitation. The court also criticized the NCLAT's inconsistent administrative guidance on the computation of limitation and emphasized the need for a seamless transition to e-filing across tribunals.
Issues: The main issue was whether the appeal was filed within the period of limitation as prescribed by the IBC and the relevant administrative orders.
Ratio Decidendi: The court held that the appeal was not barred by limitation and criticized the NCLAT's inconsistent administrative guidance on the computation of limitation. It emphasized the need for a seamless transition to e-filing across tribunals and recommended a comprehensive assessment of the position across tribunals to suggest regulatory changes.
Final Decision: The court allowed the appeal, set aside the order of the NCLAT, and restored the appeal to the file of the NCLAT for disposal on merits.
JUDGMENT
Dr Dhananjaya Y Chandrachud, CJI.
Admit.
2. This appeal arises under Section 62 of the Insolvency and Bankruptcy Code 2016["IBC"] from a judgment dated 9 January 2023 of the National Company Law Appellate Tribunal.["NCLAT" ] The NCLAT dismissed the appeal against the order of the National Company Law Tribunal["NCLT"] on the ground of limitation.
3. The appellant instituted an application under Section 7 of the IBC in June 2021 seeking the initiation of the Corporate Insolvency Resolution Process against the respondent. The application was dismissed by the NCLT by an order dated 26 August 2022. On 2 September 2022, the appellant filed an application for obtaining a certified copy of the order which was pronounced by the NCLT. The application was received by the Registry of NCLT on 5 September 2022. On 15 September 2022, the order was uploaded on the website of the NCLT and a certified copy was provided to the appellant on the same day. The appellant lodged an appeal before the NCLAT on 10 October 2022 in the e-filing mode along with an Interlocutory Application["IA"] seeking condonation of delay of five days. A physical copy of the appeal was filed on 31 October 2022.
4. The appellant submitted that the appeal had been filed within the period of limitation from the date the order was made available in the public domain i.e., 15 September 2022. However, as a matter of abundant precaution, the appellant had considered 26 August 2022 to be the date from which limitation would commence. The appellant stated that the prescribed time period of 30 days for filing the appeal ended on 5 October 2022, after accounting for the exclusion of 10 days (from 5 September 2022 to 15 September 2022 on account of the time taken to provide a certified copy). The appellant submitted that the inadvertent delay of 5 days in filing the appeal had been caused due to the additional time needed to obtain legal advice, collate documents and connect with counsel during the festive season.
5. In the background of the above sequence of events, the issue before NCLAT was whether the appeal was instituted within limitation. In its impugned order, NCLAT observed that the appeal was lodged through the e-portal on 10 October 2022, which was the 46th day after the order of the NCLT. It observed that while Section 61(2) of the IBC prescribes a 30-day deadline for preferring an appeal against an order of the adjudicating authority, the appellate tribunal can condone a delay of upto 15 days, if sufficient cause is shown. Furthermore, it held that the ingredients of Section 61 of the IBC do not visualize that an aggrieved person has to wait till he is in receipt of a certified copy of the impugned order before preferring an appeal. The tribunal held:
"31. It cannot be gainsaid, that the 'Expiry of 30 days, after the 'Pronouncement of the impugned order, dated 26.08.2022, was on 24.09.2022. The 30 days period in preferring the 'Appeal, by any 'Person Aggrieved, in respect of an 'Order, passed by the 'Adjudicating Authority, is the 'deadline prescribed as per Section 61 (2) of the Insolvency and Bankruptcy Code, 2016. If an 'Appellate Tribunal ('NCLA T), is satisfied on 'sufficient cause, being shown to its 'subjective satisfaction, in regard to the preferring of an 'Appeal (after the 'Expiry of 30 days period), then, 'such period, shall not exceed 15 days, as per Section 61 (2) of the Code. Admittedly, the 'completion of 45 days (30 + 15 days), was on 09.10.2022. In effect, the maximum 45 days being the outer limit (30 + 15 = 45 days), beyond which, the 'Appellate Tribunal ('NCLAT), is 'bereft of any power, to 'condone the delay, in the teeth of the mandate, prescribed under the I & B Code, 2016, as opined by this 'Tribunal." (emphasis supplied)
6. The NCLAT held that even according to the version of the appellants, the period of 30 days would end on 4 October 2022
The main legal point established in the judgment is the importance of clarity and consistency in administrative guidance, particularly regarding the computation of limitation for filing an appeal. Th....
Appeal – Limitation stops running on e-filing of appeal before NCLAT and not on presentation of physical copy – Date on which limitation begins to run is intrinsically linked to date of pronouncement....
(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 liq....
(1) Appeal – Period of limitation – Any party which is aggrieved by decision of NCLT can file appeal before NCLAT – Statutory time limit of 30 days within which appeal can be preferred, is extendable....
The NCLAT cannot condone delays beyond the statutory maximum of 45 days under the IBC, emphasizing strict adherence to limitation periods in insolvency processes.
Limitation for IBC appeal under Section 61 commences from NCLT order's open court pronouncement date in parties' presence, not portal upload; delay beyond 45 days non-condonable regardless of certifi....
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