1. Appeal against NCLAT order condoning delay in filing an appeal against NCLT's approval of a resolution plan under the Insolvency and Bankruptcy Code. (Para 1 , 2 , 3 )
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2025 Supreme(SC) 781
SUPREME COURT OF INDIA
J.B. Pardiwala, R. Mahadevan, JJ.
Tata Steel Ltd. – Appellant
Versus
Raj Kumar Banerjee & Ors. – Respondents
Civil Appeal No. 408 of 2023
Decided On : 07-05-2025
Important Points
The NCLAT cannot condone delays beyond the statutory maximum of 45 days under the IBC, emphasizing strict adherence to limitation periods in insolvency processes.
Subject
Corporate Law - Insolvency and Bankruptcy
Act Referred
ARBITRATION ACT: S.34
COMPANIES ACT: S.420(3), S.421(3)
GENERAL CLAUSES ACT: S.10
INSOLVENCY AND BANKRUPTCY CODE: S.238, S.30, S.31, S.61, S.7
LIMITATION ACT: S.12(2), S.2, S.4, S.43(1), S.5
NCLAT RULES: R.22(2), R.3
NCLT RULES: R.14, R.22(2), R.50
COMPANIES ACT: S.420(3), S.421(3)
GENERAL CLAUSES ACT: S.10
INSOLVENCY AND BANKRUPTCY CODE: S.238, S.30, S.31, S.61, S.7
LIMITATION ACT: S.12(2), S.2, S.4, S.43(1), S.5
NCLAT RULES: R.22(2), R.3
NCLT RULES: R.14, R.22(2), R.50
Headnote
(A) Insolvency and Bankruptcy Code, 2016 - Sections 61 and 238A - Limitation Act, 1963 - Condonation of delay - NCLAT allowed the condonation of delay for filing appeal beyond statutory period of 45 days which is ultra vires - Limitation period for appeal commenced on 07.04.2022; appeal filed on 24.05.2022 was beyond limit - NCLAT lacks jurisdiction to condone delay beyond prescribed time limit. (Paras 8, 10, 11, 12)
Judgement Key Points
Key Points: - The NCLAT allowed an application for condonation of delay in filing an appeal beyond the statutory period of 45 days under the IBC, which was challenged (!) (!) . - Section 61(2) of the IBC prescribes a limitation period of 30 days for filing an appeal, with a proviso allowing for an additional 15 days for condonation of delay upon showing sufficient cause, making a total of 45 days (!) (!) (!) . - The appellant argued that the appeal was filed beyond the statutory 45-day period, rendering it time-barred (!) (!) . - The respondent argued that the limitation period commenced later due to delayed disclosure and that the appeal was filed within the condonable period (!) (!) (!) . - Section 238A of the IBC makes the Limitation Act, 1963 applicable to IBC proceedings (!) (!) . - Section 4 of the Limitation Act and Rule 3 of the NCLAT Rules extend the limitation period to the next working day if the prescribed period expires on a holiday (!) (!) (!) (!) (!) (!) . - However, the benefit of Section 4 of the Limitation Act is only available for the "prescribed period of limitation" and not for the period extendable by the court in its discretion (the condonable period) (!) (!) (!) (!) (!) (!) (!) (!) . - The Supreme Court held that the limitation period for filing an appeal under Section 61 IBC commences from the date of pronouncement of the order by the NCLT (!) (!) . - The NCLAT has no jurisdiction to condone delay beyond the statutory maximum of 45 days prescribed under Section 61(2) of the IBC (!) (!) (!) (!) . - The NCLAT's order condoning the delay beyond the statutory period was held to be ultra vires and set aside (!) (!) . - Time is of the essence in statutory appeals, and the prescribed limitation period must be strictly adhered to; even a delay of one day is fatal if the statute does not provide for its condonation (!) .
What is the maximum period for condoning delay in filing an appeal under Section 61(2) of the IBC?
What is the scope of the NCLAT's power to condone delays beyond the statutory maximum under the IBC?
How is the limitation period for filing an appeal under Section 61(2) of the IBC computed, particularly concerning holidays and the applicability of the Limitation Act?
Legal Category Hierarchy
Advocates appeared:
For the Appellant(s) : Mr. Shivkrit Rai, Adv. Ms. Apeksha Singh, Adv. Mr. Ashok Mathur, AOR
For the Respondent(s): Mr. Brijesh Singh Bhaduriya, Adv. Ms. Shagufa Salim, AOR Mr. Aviral Kapoor, Adv. Ms. Sonal Alagh, Adv. Ms. Ekta Choudhary, AOR Mr. Ayush Kumar, Adv. Mr. Anand Krishna, Adv. Ms. Rushali Sikand, Adv.
For the Appellant(s) : Mr. Shivkrit Rai, Adv. Ms. Apeksha Singh, Adv. Mr. Ashok Mathur, AOR
For the Respondent(s): Mr. Brijesh Singh Bhaduriya, Adv. Ms. Shagufa Salim, AOR Mr. Aviral Kapoor, Adv. Ms. Sonal Alagh, Adv. Ms. Ekta Choudhary, AOR Mr. Ayush Kumar, Adv. Mr. Anand Krishna, Adv. Ms. Rushali Sikand, Adv.
Table of Contents
2. Dispute over whether the appeal was filed within the statutory 30-day limitation and 15-day condonable period, and the NCLAT's power to condone further delay. (Para 4 , 5 , 6 )
3. Limitation runs from the date of pronouncement; Section 4 of the Limitation Act applies only to the prescribed period, not the discretionary condonable period. (Para 7 , 8 , 9 , 10 )
4. NCLAT cannot condone delay beyond the 15-day period provided under the proviso to Section 61(2) of the Insolvency and Bankruptcy Code. (Para 11 )
5. Order of the NCLAT condoning the delay in filing the appeal is set aside and the appeal is allowed. (Para 12 , 13 , 14 )
6. Can the NCLAT condone delay beyond the 15-day grace period provided in Section 61(2) IBC?
No. The NCLAT is a creature of statute and cannot exceed the statutory limit of 15 days for condoning delay, even on equitable grounds, to preserve the speed and certainty of the insolvency resolution process. (Para 11 )
JUDGMENT :
R. MAHADEVAN, J.
1. This appeal is filed against the order dated 14.12.2022 passed by the National Company Law Appellate Tribunal1[For short, “NCLAT”]. By the said order, the NCLAT has allowed interlocutory application bearing No. 1667 of 2022 filed by Respondent No. 1 seeking condonation of delay in filing the appeal bearing no. C.A. (AT) (Insolvency) No. 615 of 2022.
2. The appellant is the successful resolution applicant for Rohit Ferro-Tech Limited (Corporate Debtor) having its resolution plan approved by the Committee of Creditors and subsequently by the National Company Law Tribunal2[For short, “NCLT”], Kolkata, by order dated 07.04.2022 in CP(IB)/1214(KB)/2018. Respondent No.1 is an erstwhile minority shareholder of the Corporate Debtor.
3. Respondent No.1 preferred an appeal under Section 61 of the Insolvency and Bankruptcy Code, 20163[For short, “IBC”] to set aside the order dated 07.04.2022 passed by the Adjudicating Authority and direct the Resolution Professional to scrutinise the resolution plan proposed by the appellant in accordance with Section 30 (2) IBC. Along with the appeal, he also filed an interlocutory application bearing No. 1667 of 2022 praying for condonation of delay of 15 days in filing the same. By the order impugned herein, the NCLAT condoned the delay and allowed the said application. Aggrieved by the same, the appellant is before us with the present appeal.
4. According to the learned counsel for the appellant, the NCLT passed the order approving the appellant’s resolution plan for the Corporate Debtor under Section 31 IBC on 07.04.2022. In terms of Section 61 (2) IBC, the limitation period of 30 days for filing an appeal against the said order expired on 07.05.2022, which fell on a Saturday. Even assuming the benefit of Section 4 of the LIMITATION ACT , 1963 were available, the additional / grace/ condonable period of 15 days as provided under the proviso to Section 61 (2), expired on 22.05.2022. Therefore, the right of Respondent No.1 to file an appeal stood extinguished on 22.05.2022 itself.
4.1. Adding further, it is submitted that after the expiry of the 30-day limitation period and the additional 15-day grace / condonable period, Respondent No. 1 e-filed the appeal along with an application for condonation of delay before the NCLAT, on 23.05.2022, which was the 46th day from the date of the NCLT’s order. The physical filing of the appeal was done on 24.05.2022, i.e., on the 47th day. Accordingly, the appeal was clearly barred by limitation and not maintainable in law. However, by the order impugned herein, the NCLAT erroneously allowed the application for condonation of delay by observing that Respondent No. 1 was entitled to the benefit of Section 4 of the LIMITATION ACT , 1963. It incorrectly held that the 30-day limitation period for filing the appeal expired on 09.05.2022 instead of 07.05.2022, on the ground that 07.05.2022 was a Saturday and, therefore, a court holiday. Consequently, the NCLAT wrongly computed the additional / grace/ condonable period of 15 days from 10.05.2022 instead of 08.05.2022, and concluded that this period expired on 24.05.2022 - the date on which Respondent No.1 physically filed the appeal before the NCLAT.
4.2. The learned counsel placed reliance on the decisions of this Court in V. Nagarajan v. SKS Ispat Powers Limited & Others, (2022) 2 SCC 244, Kalpraj Dharamshi & Another v. Kotak Investment Advisors Limited & Another, (2021) 10 SCC 401, Safire Technologies Pvt. Ltd. v. Regional Provident Fund Commissioner & Another, Civil Appeal No.2212 of 2021, and National Spot Exchange Limited v. Mr. Anil Kohli Civil Appeal No.6187 of 2019, wherein, it was held that a litigant under Section 61 IBC can file an appeal before the NCLAT within 30 days, which may be extended by a further period of up to 15 days upon showing sufficient cause; and no appeal can be entertained beyond this extended period.
4.3. Referring to the judgment of this Court in Ajay Gupta v. Raju @
