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2021 (10) TMI 941 - SC - IBCMaintainability of appeal before NCLAT - applicability of time limitation - Whether the appeal before the NCLAT under Section 61(1) of the IBC was barred by limitation? - HELD THAT - The salient aspects of Section 29(2) of the Limitation Act are three fold- (i) prescription of a period of limitation under any special law or local law may differ from the period prescribed by the Schedule under the Limitation Act; (ii) in such a case, the period of limitation prescribed under the special or local law shall be deemed to be period prescribed for the purpose of Section 3 of the Limitation Act; and (iii) Section 3 of the Limitation Act shall apply accordingly. An appeal is a creature of statute, hence there is a fundamental distinction between the right to file a suit and the right to file an appeal. In terms of Section 9 of the Code of Civil Procedure, 1908, there is an inherent right to bring a suit of a civil nature, unless the suit is barred by statute - An appeal lies against an order of the Adjudicating Authority to the Appellate Authority, the NCLAT, under Section 61(1) of the IBC. An order of the NCLAT is subject to an appeal on a question of law to the Supreme Court under Section 62. The jurisdiction of civil courts has been explicitly ousted by Section 63 of the IBC. The import of Section 12 of the Limitation Act and its explanation is to assign the responsibility of applying for a certified copy of the order on a party. A person wishing to file an appeal is expected to file an application for a certified copy before the expiry of the limitation period, upon which the time requisite for obtaining a copy is to be excluded. However, the time taken by the court to prepare the 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 - in the absence of an application for a certified copy, the appeal was barred by limitation much prior to the suo motu direction of this court, even after factoring in a permissible fifteen days of condonation under Section 61(2). The Court is not empowered to condone delays beyond statutory prescriptions in special statutes containing a provision for limitation. Section 12(2) of the Limitation Act allows for an exclusion of the time requisite for obtaining a copy of the decree or order appealed against. It is not open to a person aggrieved by an order under the IBC to await the receipt of a free certified copy under Section 420(3) of the Companies Act 2013 read with Rule 50 of the NCLT and prevent limitation from running. Accepting such a construction will upset the timely framework of the IBC. The 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. A sleight of interpretation of procedural rules cannot be used to defeat the substantive objective of a legislation that has an impact on the economic health of a nation - Rule 22(2) of the NCLAT Rules mandates the certified copy being annexed to an appeal, which continues to bind litigants under the IBC. While it is true that the tribunals, and even this Court, may choose to exempt parties from compliance with this procedural requirement in the interest of substantial justice, as re-iterated in Rule 14 of the NCLAT Rules, the discretionary waiver does not act as an automatic exception where litigants make no efforts to pursue a timely resolution of their grievance. The appellant having failed to apply for a certified copy, rendered the appeal filed before the NCLAT as clearly barred by limitation. Appeal dismissed.
Issues Involved:
1. Whether the appeal before the NCLAT under Section 61(1) of the IBC was barred by limitation. 2. When does the clock for calculating the limitation period run for appeals filed under the IBC. 3. Is the annexing of a certified copy mandatory for an appeal to the NCLAT against an order passed under the IBC. Detailed Analysis: Issue 1: Whether the appeal before the NCLAT under Section 61(1) of the IBC was barred by limitation. The appeal arises from the NCLAT's dismissal of the appellant's appeal as barred by limitation. The NCLAT relied on Section 61(2) of the IBC, which mandates a limitation period for appeals to be thirty days, extendable by fifteen days. The NCLAT noted that the statutory time limit had expired, and no application for condonation of delay was filed. The appellant argued that the NCLT's order was uploaded on 12 March 2020, and the appeal was filed on 8 June 2020, relying on the Supreme Court's suo motu order dated 15 March 2020 extending limitation due to the COVID-19 pandemic. However, the Supreme Court held that the limitation period commenced once the order was pronounced, and the appellant failed to apply for a certified copy within the prescribed period. The appeal was thus barred by limitation. Issue 2: When does the clock for calculating the limitation period run for appeals filed under the IBC. The Supreme Court clarified that the IBC is a complete code with an overriding effect. Section 61(2) of the IBC prescribes a limitation period of thirty days for filing an appeal, extendable by fifteen days upon showing sufficient cause. The Court emphasized that the IBC's timelines are sacrosanct and critical for the workability of the mechanism, health of the economy, recovery rate of lenders, and valuation of the corporate debtor. The Court held that the limitation period begins from the date of pronouncement of the order, and not from the date the order is made available to the aggrieved party. The appellant is expected to exercise due diligence and apply for a certified copy upon pronouncement of the order. Issue 3: Is the annexing of a certified copy mandatory for an appeal to the NCLAT against an order passed under the IBC. Rule 22(2) of the NCLAT Rules mandates that an appeal must be accompanied by a certified copy of the impugned order. The Supreme Court held that parties cannot automatically dispense with their obligation to apply for and obtain a certified copy for filing an appeal. Section 12(2) of the Limitation Act allows for the exclusion of the time requisite for obtaining a certified copy, provided an application for the same is filed within the limitation period. The Court noted that the appellant failed to apply for a certified copy and relied on the date of uploading the order. Consequently, the appeal was barred by limitation. Conclusion: The Supreme Court dismissed the appeal, holding that: 1. The limitation period for filing an appeal under Section 61(1) of the IBC begins from the date of pronouncement of the order. 2. The appellant failed to apply for a certified copy within the prescribed period, rendering the appeal barred by limitation. 3. Rule 22(2) of the NCLAT Rules mandates the annexation of a certified copy for filing an appeal, and the appellant's failure to comply with this requirement resulted in the dismissal of the appeal. The Court emphasized the importance of adhering to the timelines prescribed under the IBC to ensure the timely resolution of insolvency proceedings.
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