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2025 (2) TMI 962 - AT - IBCCondonation of 18 days delay in filing of the Appeal - Sufficient cause for delay or not. Whether when the condonable period of 15 days as prescribed under Section 61(2) of the proviso is falling on a day on which the Appellate Tribunal is closed whether the condonable period shall stand extended upto the date when Court re-opens? - HELD THAT - This Tribunal referring to the judgment of the Hon ble Supreme Court in Assam Urban Water Supply and Sewerage Board vs. Subhash Projects and Marketing Ltd. 2012 (1) TMI 412 - SUPREME COURT clearly held that the period of one month under which the delay in filing the application should be condoned is not the period of limitation. It is held that 15 days condonable period even if it is coming to an end on a day when the Tribunal is closed the benefit of Rule 3 or Section 4 of the Limitation Act cannot be extended. Whether for computing the 30 days period for filing the Appeal under Section 61 the limitation of 30 days period expiring on a day on which Tribunal is closed for the period shall be excluded upto the period on which Tribunal re-opens for computation of 30 days period for filing of the Appeal? - HELD THAT - Rule 3 of the NCLAT Rules specifically provides that in computing the time the day from which the said period is to be reckoned shall be excluded and if the last day expires on a day when the office of the Appellate Tribunal is closed that day and any succeeding day on which the Appellate Tribunal remains closed shall also be excluded. On reading Rule 3 of the NCLAT Rules it clearly provides that when the last date expires on a day when the office of the Appellate Tribunal is closed that day and any succeeding day on which the Appellate Tribunal remains closed shall also be excluded. In the facts of the present case the order was passed on 31.07.2024 and by giving benefit of two days for certified copy 30th day when limitation was expiring shall be 01.09.2024. 31st August 2024 and 1st September 2024 being Saturday and Sunday the Appeal could have been filed on 02.09.2024 which was the day when the Appellate Tribunal was to re-open. Rule 3 of the NCLAT rules which provides for exclusion of the period which falls on day when the office of the Appellate Tribunal is closed. Hence exclusion of the period is specifically provided in the Rules. The judgment of the Delhi High Court which had only considered Section 4 of the Limitation Act had no occasion to consider the rule 3 of the NCLAT Rules 2016. Hence by virtue of Rule 3 the said judgment of the High Court cannot be held to be applicable in the facts of the present case - by virtue of Rule 3 of the NCLAT Rules 2015 when last date for period of computation of limitation is falling on a day when office of the Tribunal is closed the said period shall be excluded. Thus in the present case 30.08.2024 which was the 30th day for filing the Appeal and by giving two days for certified copy 30th day will be 01.09.2024 and 31st August 2024 and 1st September 2024 being Saturday and Sunday both the days have to be excluded for computing the period of 30 days of limitation. Hence the last day for filing of the Appeal shall be 01.09.2024. For computing 30 days period for filing the Appeal under Section 61 if the office of the Tribunal is closed on the 30th day the period shall extend upto the date on which the Tribunal re-opens. Whether the delay is within condonable period and sufficient cause has been made out to condone the delay? - HELD THAT - The 30 days period when expiring on a day when the Court is closed the said period also be excluded while computing the period of limitation. Reasons have been given by the Appellant in the application for explaining the delay of 15 days in filing the Appeal. The Appellant is an organization which require approval at the organization level for filing an Appeal which grounds have been pleaded in the application - there is sufficient ground given in the application explaining the delay in filing the Appeal. The delay condonation application filed within condonable period and there being sufficient cause being shown for condonation of the delay the delay condonation application deserves to be allowed and the Applicant has made out sufficient cause for condonation of the delay. The delay in filing the Appeal is accordingly condoned. Whether the delay in filing is within condonable period and sufficient cause has been made out to condone the delay? - HELD THAT - Impugned order was passed on 31.07.2024 and the Appeal was e-filed on 17.09.2024. There is no material on record to indicate that certified copy was applied by the Appellant. The Appellant is thus not entitled for any exclusion on the ground of certified copy which exclusion was available for the Applicant in Company Appeal (AT) (Ins.) No.1862 of 2024. The 30 days period shall come to an end on 30.08.2024 the Appeal filed on 17.09.2024 was beyond condonable period. 30th August 2024 was not a holiday the Appeal having been filed on 17.09.2024 i.e. beyond 15 days condonable period IA No.6950 of 2024 deserves to be rejected. In result IA No.6950 of 2024 is dismissed. Conclusion - The 15-day condonable period under Section 61(2) of the IBC cannot be extended by Rule 3 of the NCLAT Rules or Section 4 of the Limitation Act if it ends on a day when the Tribunal is closed. The application for condonation of delay is allowed.
ISSUES PRESENTED and CONSIDERED
(1) Whether the condonable period of 15 days under Section 61(2) of the Insolvency and Bankruptcy Code (IBC) can be extended if it falls on a day when the Appellate Tribunal is closed. (2) Whether the computation of the 30-day period for filing an appeal under Section 61 of the IBC should exclude days when the Tribunal is closed, specifically if the 30th day falls on such a day. (3) Whether the delay in filing IA 6846 of 2024 in Company Appeal (AT) (Ins.) No.1862 of 2024 is within the condonable period and if sufficient cause has been shown to condone the delay. (4) Whether the delay in filing IA 6950 of 2024 in Company Appeal (AT) (Ins.) No.1883 of 2024 is within the condonable period and if sufficient cause has been shown to condone the delay. ISSUE-WISE DETAILED ANALYSIS Issue 1: Extension of the Condonable Period The relevant legal framework includes Section 61(2) of the IBC, which allows for a 30-day period to file an appeal, with a possible extension of 15 days for sufficient cause. Section 4 of the Limitation Act, 1963, provides for the extension of the prescribed period when the court is closed. Rule 3 of the NCLAT Rules, 2016, states that if the last day of a prescribed period falls on a day when the office is closed, that day and any succeeding closed days should be excluded. The Court interpreted that the 15-day condonable period is not a "prescribed period" under the Limitation Act, thus Section 4 does not apply to extend it. The Court relied on precedents from the Supreme Court, including Assam Urban Water Supply and Sewerage Board vs. Subhash Projects and Marketing Ltd., which clarified that the condonable period is not part of the prescribed limitation period. The Court concluded that the 15-day condonable period cannot be extended by Rule 3 or Section 4 of the Limitation Act if it ends on a day when the Tribunal is closed. Issue 2: Computation of the 30-Day Period The Court examined whether the 30-day period for filing an appeal should exclude days when the Tribunal is closed. Rule 3 of the NCLAT Rules provides for the exclusion of such days in computing the period. The Court noted that Rule 3 explicitly states that if the last day of a period falls on a day when the Tribunal is closed, that day and any succeeding closed days should be excluded. This interpretation aligns with the precedent set in Raj Kumar Banerjee vs. Supriyo Kumar Chaudhuri, where the Tribunal allowed for the exclusion of closed days when computing the limitation period. The Court concluded that the 30-day period should indeed exclude days when the Tribunal is closed, thereby extending the period to the next open day. Issue 3: Delay in IA 6846 of 2024 The application for condonation of delay in IA 6846 of 2024 involved a delay of 14 days. The Court considered whether this delay was within the condonable period and if sufficient cause was shown. The Court found that the application was filed within the condonable period, as the 30-day period was computed to end on a day when the Tribunal was closed, thus extending the period to the next open day. The reasons provided for the delay, including organizational approval processes, were deemed sufficient. The Court concluded that the delay was within the condonable period and allowed the application. Issue 4: Delay in IA 6950 of 2024 The application for condonation of delay in IA 6950 of 2024 involved a delay beyond the condonable period. The Court examined whether the delay could be condoned. The Court found that the application was filed beyond the 15-day condonable period, as the 30-day period ended on a day when the Tribunal was open, and no exclusion for obtaining a certified copy was applicable. The Court concluded that the delay was not within the condonable period and rejected the application. SIGNIFICANT HOLDINGS The Court held that the 15-day condonable period under Section 61(2) of the IBC cannot be extended by Rule 3 of the NCLAT Rules or Section 4 of the Limitation Act if it ends on a day when the Tribunal is closed. The Court further held that the 30-day period should exclude days when the Tribunal is closed, extending the period to the next open day. The Court allowed the application for condonation of delay in IA 6846 of 2024, finding sufficient cause for the delay, but rejected the application in IA 6950 of 2024 as it was beyond the condonable period.
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