2023 (12) TMI 1249 - SC - Insolvency and Bankruptcy

Condonation of delay in filing an appeal before NCLAT - whether the appeal was instituted within limitation? - Maintainability of application under Section 7 of the IBC - HELD THAT - On the facts of the case, the Court noted that the appeal was barred by limitation as the appellant did not even attempt to secure a certified copy and only relied on the date of uploading the order on the website. Significantly, in the case, there was a pronouncement on the date mentioned on the order and the appellant did not dispute his presence before the NCLT when the order was pronounced in open court. The date on which the limitation begins to run is intrinsically linked to the date of pronouncement. The question that arises in the facts of the present case, therefore, is when is an order deemed to be pronounced. The National Company Law Tribunal Rules, 2016 NCLT Rules provide guidance in this regard. Rule 89(1) of the NCLT Rules indicates that when NCLAT registry publishes its cause list, a distinction is drawn between cases listed for pronouncement of orders and other cases. In the present case, the cause list for 17 May 2023 placed on record by the appellant indicates that the case was listed for admission and not for pronouncement. Further, on a specific query of the Court, it is not in dispute between counsel for the appellant and the respondent, that no substantive order was passed on 17 May 2023 by the NCLT. In these circumstances, limitation would not begin to run on 17 May 2023 which was the date on which hearings concluded. As no order was passed before 30 May 2023, there was no occasion for the appellant to lodge an application for a certified copy on 17 May 2023. Time for filing an appeal would commence only when the order appealed from was uploaded since prior to that date no order was pronounced. The period of limitation began to run on 30 May 2023. The 30- day limitation period provided in Section 61(2) of the IBC concluded on 29 June 2023. Though the appeal was filed beyond the period of thirty days, it was within the condonable period of fifteen days - the appeal should be restored to the NCLAT for reconsidering whether the appellant has shown sufficient cause for condoning the delay beyond thirty days. Appeal disposed off.

Summary

Issues Involved:
1. Determination of the question of limitation.
2. Commencement of the limitation period for filing an appeal under Section 61 of the Insolvency and Bankruptcy Code (IBC).
3. Applicability of the decisions in V Nagarajan v. SKS Ispat and Sanket Kumar Agarwal v. APG Logistics Private Limited.

Summary:

1. Determination of the question of limitation:
The appeals arise under Section 62 of the Insolvency and Bankruptcy Code 2016 (IBC) from a judgment of the National Company Law Appellate Tribunal (NCLAT), which dismissed the appeal against the order of the National Company Law Tribunal, Mumbai (NCLT) on the ground of limitation. The findings in this judgment are limited to a determination of the question of limitation.

2. Commencement of the limitation period for filing an appeal under Section 61 of the IBC:
The appellant contended that the limitation period should run from the date they became aware of the order (30 May 2023) and that the summer vacations should be excluded from the calculation of limitation. The NCLAT concluded that the appeal was barred by limitation as it was instituted beyond the outer limit of 45 days permissible under Section 61 of the IBC. The NCLAT relied on this Court's decision in V Nagarajan v. SKS Ispat and rejected the appellant's contention that the time should begin to run from the date of upload (30 May 2023). The appeal was dismissed as barred by limitation.

3. Applicability of the decisions in V Nagarajan v. SKS Ispat and Sanket Kumar Agarwal v. APG Logistics Private Limited:
In V Nagarajan, it was held that limitation commences from the date of pronouncement and not the date of upload of the order or receipt of a certified copy. However, the time taken to procure the certified copy will be excluded from the calculation of the period of limitation, provided the appellant applies within the prescribed period of limitation under Section 61(2) of the IBC. In Sanket Kumar Agarwal, it was clarified that the limitation stops running on the e-filing of an appeal before the NCLAT and not on the presentation of a physical copy. The date on which the order is pronounced is to be excluded from the calculation of limitation, and the time taken by the NCLT to provide the appellant with the certified copy would be excluded from the calculation of limitation, provided the appellant applies within the prescribed period.

In the present case, the cause list for 17 May 2023 indicated that the case was listed for admission and not for pronouncement. It was not in dispute that no substantive order was passed on 17 May 2023 by the NCLT. Therefore, limitation would not begin to run on 17 May 2023. Time for filing an appeal would commence only when the order appealed from was uploaded since prior to that date no order was pronounced. As no order was passed before 30 May 2023, there was no occasion for the appellant to lodge an application for a certified copy on 17 May 2023.

Conclusion:
The period of limitation began to run on 30 May 2023. The 30-day limitation period provided in Section 61(2) of the IBC concluded on 29 June 2023. Though the appeal was filed beyond the period of thirty days, it was within the condonable period of fifteen days. The appeal should be restored to the NCLAT for reconsidering whether the appellant has shown sufficient cause for condoning the delay beyond thirty days. The impugned order of the NCLAT declining to condone the delay is set aside, and the proceedings are restored to the file of the NCLAT. The appeals are accordingly disposed of, and pending applications, if any, stand disposed of.