Limitation for IBC Appeals Begins with Pronouncement and Not with Receipt of the Certified Copy

When Does Limitation Begin for Filing an Appeal under the IBC?

The right to appeal must be exercised within the period prescribed by law. This requirement is particularly important under the Insolvency and Bankruptcy Code, 2016 (IBC), which sets strict timelines to ensure the speedy resolution of insolvency proceedings. Delayed appeals may affect creditors' interests, postpone the implementation of resolution plans, and create uncertainty regarding the revival of financially distressed businesses.

An important question arises when an order is pronounced on one date but its certified copy is received later. Does limitation begin on the date of pronouncement or on the date of receipt of the certified copy? This question assumes significance because Section 62(1) of the IBC prescribes 45 days from receipt of the order, while Section 12(2) of the Limitation Act, 1963 permits exclusion of the time required to obtain its copy.

The Supreme Court, in The Assistant Commissioner Of Central Tax, CGST Division Versus Sreenivasa Rao Ravinuthala And Another.-2026 (10) TMI 981 - Supreme Court , has clarified that limitation begins upon pronouncement of the NCLAT order, not upon receipt of its certified copy. Although the time required to obtain the certified copy may be excluded, the delay in applying for it cannot be excluded. The judgment clarifies the relationship between Section 62 of the IBC and Section 12(2) of the Limitation Act.

Central Excise Dues and the Resolution Plan Led to the Dispute

The dispute arose from outstanding Central Excise dues of M/s Samyu Glass Private Limited, a manufacturer of glass containers registered as an Export Oriented Unit. Between 2013 and 2017, the Department initiated recovery proceedings, which the company challenged before CESTAT. Meanwhile, Andhra Bank initiated insolvency proceedings under Section 7 of the IBC, leading to the commencement of the Corporate Insolvency Resolution Process (CIRP). The Department submitted a claim of Rs. 22.60 crore on 27.11.2019. The Resolution Professional also proposed settlement of Central Excise arrears of Rs. 4.33 crore under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.

On 13.08.2021, the NCLT, Hyderabad, approved a resolution plan providing only Rs. 1,34,657 towards the Department's outstanding dues. The Department challenged the plan before the National Company Law Appellate Tribunal (NCLAT), Chennai, which upheld it on 02.08.2023. Thereafter, the Department filed an appeal before the Supreme Court under Section 62 of the IBC on 21.11.2023, the 111th day after pronouncement of the NCLAT judgment. The respondent objected that the appeal was barred by limitation.

The Department argued that limitation commenced on 11.10.2023, when it received the certified copy of the NCLAT judgment, and therefore its appeal was within the prescribed 45 days. The respondent contended that limitation could not be postponed merely because the Department had delayed applying for the certified copy. Thus, the central issue before the Supreme Court was whether limitation commenced from pronouncement of the NCLAT order or from receipt of its certified copy.

Statutory Framework Governing Appeals under the IBC

Section 62(1) of the IBC permits any person aggrieved by an order of the National Company Law Appellate Tribunal (NCLAT) to file an appeal before the Supreme Court on a question of law arising from that order. The provision prescribes a limitation period of 45 days from the date of receipt of the order. Section 62(2) further permits the Supreme Court to condone a delay of up to 15 days beyond the normal period, provided sufficient cause is established. Thus, the maximum permissible period is 60 days, after allowing any legally excludable time. The additional 15 days are not available automatically, and the Court cannot condone delay beyond the statutory limit.

Section 238-A of the IBC makes the provisions of the Limitation Act, 1963 applicable to proceedings and appeals under the Code, as far as may be. Section 12(2) of the Limitation Act permits the exclusion of the day on which the judgment was pronounced and the time requisite for obtaining a copy of the order appealed against. However, the Explanation to Section 12 clarifies that the time taken by the court or tribunal to prepare the order before an application for its copy is made cannot be excluded. Therefore, the period spent before applying for a certified copy ordinarily counts towards limitation, while the time legitimately required to obtain it may be excluded.

The Supreme Court emphasised that the IBC is a special and self-contained law. Its provisions prevail over inconsistent provisions of other laws by virtue of Section 238. Consequently, the general provisions of the Limitation Act cannot be applied in a manner that defeats the special limitation framework under the IBC. Exclusion of time under Section 12(2) and condonation of delay under Section 62(2) are distinct concepts. The former concerns the computation of limitation, while the latter permits a limited extension upon sufficient cause.

Competing Positions on Commencement of Limitation

The Department relied upon the expression "from the date of receipt of such order" appearing in Section 62(1) of the IBC. It argued that limitation should commence from 11.10.2023, when it actually received the certified copy of the NCLAT judgment, rather than from 02.08.2023, when the judgment was pronounced. Since the appeal was filed on 21.11.2023, within 45 days of receiving the certified copy, the Department contended that it was within limitation. It also relied upon the difference in wording between Sections 61 and 62 of the IBC to support its interpretation.

The respondent argued that limitation commenced upon pronouncement of the NCLAT judgment. Although the time required to obtain a certified copy could be excluded under Section 12(2) of the Limitation Act, the period of inaction before applying for that copy could not be excluded. The Department applied for the certified copy only on 06.09.2023 and received it on 11.10.2023. Even after excluding the time taken to obtain the copy, the appeal filed on 21.11.2023 exceeded the maximum permissible period.

The Supreme Court was therefore required to determine whether actual receipt of the certified copy provided a fresh starting point for limitation or whether limitation commenced upon pronouncement, subject to the statutory exclusion for obtaining the copy.

Pronouncement of the NCLAT Order Determines Commencement of Limitation

The Supreme Court rejected the Department's interpretation. It examined Rule 91 of the NCLAT Rules, 2016, which governs pronouncement of orders. Where an order is reserved, the date of pronouncement is notified in the cause list, and reading the operative portion in open court constitutes pronouncement. The Court held that compliance with this procedure gives the parties knowledge of the pronouncement. Accordingly, limitation for filing an appeal under Section 62 of the IBC commences when the NCLAT pronounces its order.

The Court also referred to Order XIX Rule 3(2)(i), read with Rule 40 of the Supreme Court Rules, 2013, which requires an appellant to obtain and produce a certified copy. Accordingly, an appellant cannot postpone the commencement of limitation by delaying the application for or the collection of the certified copy. If actual receipt were treated as the starting point in every case, limitation would depend on the appellant's convenience and could become uncertain or indefinite.

The Court further observed that such an interpretation would make Section 12(2) of the Limitation Act redundant. If limitation commenced only upon receipt of the certified copy, there would be no meaningful need to exclude the time required to obtain it. The Court therefore held that limitation commences upon pronouncement, while only the time requisite for obtaining the certified copy may be excluded. The period of inaction before applying for the copy remains part of the limitation period.

Earlier Supreme Court Decisions Reinforce the Strict Limitation Framework

The Supreme Court relied on SAGUFA AHMED & ORS. Versus UPPER ASSAM PLYWOOD PRODUCTS PVT. LTD. & ORS. - 2020 (9) TMI 713 - Supreme Court, which distinguished the prescribed limitation period from the additional period during which delay may be condoned. However, the Court clarified that the statutory framework considered in that decision was different. Under Section 420(3) of the Companies Act, 2013, read with Rule 50 of the NCLT Rules, 2016, there was a statutory mechanism for providing a free certified copy. That framework could not govern the commencement of limitation under Section 62 of the IBC.

In V Nagarajan Versus SKS Ispat and Power Ltd. & Ors. - 2021 (10) TMI 941 - Supreme Court (LB), the Supreme Court recognised that the IBC is a special and self-contained law, and its limitation provisions must be strictly observed. It also held that obtaining a certified copy is not merely a procedural formality and that an appellant must exercise diligence in applying for it. The time spent before filing the application cannot be automatically excluded. The strict timelines under the IBC serve the broader objective of preserving asset value, protecting creditors' interests, and ensuring timely insolvency resolution.

The Court also referred to CA Ramchandra Dallaram Choudhary Versus Adani Infrastructure And Developers Private Limited - 2026 (6) TMI 586 - Supreme Court, which reaffirmed that the maximum permissible period under Section 62 is 60 days, comprising 45 days of normal limitation and a further 15 days of condonable delay. Procedural rules governing filing or re-filing cannot override the statutory limitation framework. These decisions supported the conclusion that courts cannot enlarge the prescribed period beyond the limits permitted by the IBC.

Department's Appeal Exceeded the Maximum Permissible Period

The Supreme Court examined the relevant dates to determine whether the Department's appeal was within limitation after allowing the exclusion permitted under Section 12(2) of the Limitation Act.

The Department consumed 35 days before applying for the certified copy and another 41 days after receiving it. Thus, the total actionable period was 76 days. The intervening 35 days required to obtain the certified copy were excluded under Section 12(2). After allowing that exclusion, the normal limitation period expired on 21.10.2023, while the further condonable period expired on 05.11.2023. However, the appeal was filed on 21.11.2023, exceeding the maximum permissible period of 60 days by 16 days.

The Court held that the time required to obtain the certified copy could be excluded, but the Department's delay before applying for the copy and after receiving it could not be excluded. Consequently, the appeal was beyond the period within which the Supreme Court could condone delay.

Implications for Tax Authorities and Other Creditors

Although the dispute arose from outstanding Central Excise dues, the Supreme Court did not examine the substantive correctness of the resolution plan or determine whether the Department was entitled to a higher amount. The appeal was dismissed solely on limitation. Nevertheless, the judgment has important implications for tax authorities participating in insolvency proceedings. Government departments must comply with the statutory limitation periods, irrespective of the amount of revenue involved. Internal procedures, legal consultations and administrative approvals cannot independently extend the maximum period prescribed under Section 62.

The decision also highlights the need for prompt action after the pronouncement of an adverse order. Tax authorities and other creditors should immediately ascertain the date of pronouncement, apply for the certified copy and initiate the appellate process without unnecessary delay. Proper records of the application date and receipt of the certified copy are essential to claim exclusion under Section 12(2) of the Limitation Act.

The principle applies equally to financial creditors, operational creditors, resolution applicants and other stakeholders. A substantial claim or an arguable question of law cannot overcome a statutory bar of limitation. The judgment therefore reinforces the importance of procedural diligence in insolvency proceedings, where speedy resolution and finality are central objectives.

Final Decision and the Principle Emerging from the Judgment

The Supreme Court sustained the preliminary objection and held that the Department's appeal was barred by limitation. Although the 35 days taken to obtain the certified copy were excluded, the Department had consumed 76 actionable days, exceeding the maximum permissible period of 60 days. The appeal was therefore filed 16 days beyond the statutory limit, leaving the Court without jurisdiction to condone the additional delay. Accordingly, the civil appeal was dismissed without examining its merits.

The judgment establishes that limitation under Section 62 of the IBC commences upon pronouncement of the NCLAT order, while the time legitimately required to obtain a certified copy may be excluded under Section 12(2) of the Limitation Act. The appellant cannot postpone the commencement of limitation by delaying the application for or collection of the certified copy.

The ruling serves as an important reminder that the right to appeal must be exercised promptly. For tax authorities and other creditors, the practical lesson is clear: the time required to obtain a certified copy may be excluded, but the appellant's own delay cannot be used to extend the statutory limitation period.

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