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Synopsis

The Supreme Court has said that a litigant has to file its appeal under Section 61(2) of the IBC within 30 days which can be extended up to a period of 15 days, and no more, upon showing sufficient cause as a slate of interpretation of procedural rules cannot be used to defeat the substantive objective of legislation which is prescribed in a time frame. 

As a result, thereof, the period of limitation for filing the appeal having been laid down and proviso thereto limiting the exercise up to a distance for condoning the delay mandatorily has to be adhered to, the court said.

A bench of Justices Abhay S Oka, Ahsanuddin Amanullah and Augustine George Masih emphasised that the period to compute limitation to file an appeal under Section 61 IBC from the order of NCLT commences from the date of uploading of the order by the Registry as the commencement of the period of limitation is intrinsically linked to the date of pronouncement.   

The court said the incident which triggers limitation to commence is the date of pronouncement of the order, and in case of non-pronouncement of the order, when the hearing concludes, the date on which the order is pronounced or uploaded on the website.

"However, where the judgment was pronounced in open court, the period of limitation starts running from that very day. The appellant is however entitled to seek relief under Section 12(2) of the Limitation Act for excluding the period during which the certified copy was under preparation on an application preferred by that party," the bench said. 

Court pointed out the statutory time limit of 30 days within which an appeal can be preferred has been provided for in sub-section (2) of Section 61 of IBC. Proviso thereto allows an additional period of 15 days to file an appeal only on the satisfaction of NCLAT that there was sufficient cause for not filing the appeal earlier within the initial period of 30 days.

"The restrictions with regard to allowing extension in the provisions stipulated is cloaked in such a manner that the provisions have to be strictly followed. The first aspect is that the period is extendable by 15 days and not beyond that. The limit, therefore, has been prescribed as regards the period within which the discretion has to be applied by NCLAT. That apart, this period cannot be claimed as a matter of right for extension of the limitation rather it is laced with the satisfaction at the end of the NCLAT upon having shown sufficient cause," the bench said.

The discretion, therefore, has further been circumscribed and not merely left at the whims and fancy of NCLAT. The cumulative reading of the proviso would therefore entail that the extension of period so provided for has to be strictly construed and has not to be exercised in a liberal manner which highlights the legislative intent which has to be given effect to, the court added.

The bench also pointed out Rule 50 of the NCLAT Rules makes it mandatory for the Registry to send the certified copy of the final order passed by NCLT to the concerned parties free of cost and the certified copies may be made available with costs as per the schedule of fees in all other cases. Rule 22 of the NCLAT Rules deals with the presentation of the appeal in form NCLAT-1. Sub-rule 2 thereof mandates that an appeal shall be accompanied by the certified copy of the impugned order.

The court said, mandate of Rule 22(2) of NCLAT Rules has to be complied with which requires certified copy to be annexed along with appeal which binds a litigant under the IBC. The appellant having failed to apply for certified copy renders appeal filed before the NCLAT as clearly barred by limitation.

In the instant matter, the appeals were preferred against the order of January 18, 2024 passed by the National Company Law Appellate Tribunal, where appeals preferred by the appellant stood dismissed as a consequence of dismissal of the applications of condonation of delay on the even date.

The court said the appeals as preferred by the appellant needed to be dismissed as they were filed beyond 30 days and no steps had been taken by the appellant to seek a certified copy of the order.

It said there was no question of moving an application for condonation of delay when no application for obtaining a certified copy of the order had been filed. Exemption from filing of certified copy cannot be claimed as a matter of right in terms of the statutory requirements of the Rules, court held. 

As regards the first appeal, which was accompanied with the certified copy supplied free by NCLT. court said, the same also being beyond the period of limitation and the time of ten days as sought to be exempted for the preparation and making available the certified copy could not be credited to the benefit of the appellant as the period of limitation commences from the date of pronouncement of the order and the benefit of Section 12(2) of the Limitation Act is available only on an application for grant of certified copy of the order having been filed till the date of preparation of the said certified copy. Since no such steps have been taken by the appellant for applying the certified copy, the appeal was beyond limitation, the court held.

The court also said that the application of condonation of delay in the first appeal, disclosing no reasons whatsoever in filing the appeal, the appellate tribunal was justified in dismissing the application for condonation of delay. The satisfaction has to be of the appellate tribunal and that too on justifiable grounds, which, as is apparent, from the perusal of the application there is none pleaded which can be said to be projecting sufficient cause for not approaching the appellate tribunal within the time stipulated under Section 61(2) of the IBC.

The bench upheld the impugned order of January 18, 2024 passed by the NCLAT and dismissed the present appeals.

Case Title: A Rajendra Vs Gonugunta Madhusudhan Rao & Ors