2022 (6) TMI 285 - SCH - Insolvency and Bankruptcy

Appeal before NCLAT - applicability of time limitation - Section 61(2) of the IBC - Non-consideration of claim regarding the provident fund dues - HELD THAT - The limitation prescribed by Section 61 of the IBC fell for consideration of this Court in KALPRAJ DHARAMSHI ANR. VERSUS KOTAK INVESTMENT ADVISORS LTD. ANR. 2021 (3) TMI 496 - SUPREME COURT . In the said judgment, it was categorically held by this Court that an appeal against the order of NCLT shall be preferred within a period of 30 days from the date on which the order was passed by the NCLT. The Appellate Tribunal has the power to extend the period of limitation by another 15 days. The Appellate Tribunal committed an error in issuing notice in an appeal that was filed by Respondent No.1 with delay of 388 days - Appeal allowed.

Summary

Issues:

1. Interpretation of Section 61(2) of the Insolvency and Bankruptcy Code regarding the timeline for filing appeals before the National Company Law Appellate Tribunal (NCLAT).
2. Consideration of the limitation period for filing appeals against orders passed by the National Company Law Tribunal (NCLT).
3. Application of the principle of liberal construction in relation to limitation periods for appeals.

Analysis:

1. The judgment dealt with the interpretation of Section 61(2) of the Insolvency and Bankruptcy Code (IBC) concerning the timeline for filing appeals before the National Company Law Appellate Tribunal (NCLAT). The appellant argued that appeals against NCLT orders must be filed within 45 days, while the respondent contended that the period starts from the date of knowledge. The appellant relied on a specific judgment, Kalpraj Dharamshi, which established a 30-day limit for filing appeals with a possible 15-day extension by the Appellate Tribunal. The Court emphasized the relevance of the specific IBC provision over other legal references cited by the respondent.

2. Regarding the consideration of the limitation period for filing appeals against NCLT orders, the Court referenced the judgment in Kalpraj Dharamshi, which unequivocally stated the 30-day timeline for appeal initiation. The Court clarified that the Appellate Tribunal could extend this period by an additional 15 days. In this case, the respondent's appeal was delayed by 388 days, significantly exceeding the permissible limit. Consequently, the Court found that the NCLAT had erred in issuing notice for an appeal filed well beyond the statutory timeframe, thereby allowing the appellant's appeal.

3. The application of the principle of liberal construction in relation to limitation periods for appeals was briefly discussed. While the respondent sought to apply a liberal interpretation based on a different legal context, the Court emphasized the importance of adhering to the specific provisions outlined in the IBC. By referencing the judgment in Kalpraj Dharamshi and emphasizing the strict adherence to the statutory timelines for filing appeals, the Court reinforced the significance of procedural compliance in insolvency proceedings. The judgment highlighted the necessity of adhering to the statutory framework to maintain consistency and efficiency in resolving insolvency cases.