2024 (4) TMI 1065 - AT - Insolvency and Bankruptcy

Company's appeal dismissed for being 12 days late as limitation period starts from judgment date not certified copy receipt

NCLAT dismissed an appeal filed by a company against NCLT's order for being time-barred. The tribunal held that limitation period for filing appeals under ... Delayed filing of appeal - relevant date for calculation of time limitation - from the date of pronouncement of the Judgment or from the date of uploading of the judgement - Maintainability of section 9 application - initiation of CIRP Proceedings - HELD THAT:- Under the NCLAT Rules, the provision for preferring an Appeal is contemplated, under section 61, which provides for the time period during which appeal could be filed before the Appellate Tribunal i.e. within the 30 days of passing of the Order, the same could be registered only based on the Certified Copy of the Order upon being produced as per Rule 22, as certified copy has be filed of along with the Appeal - The issue would be as to whether the Free Copy which has been issued under Rule 50 of the NCLT Rules, cannot be taken as to be the Certified Copy under the Provisions of section 22(2) to enable to file an appeal under section 61. It has not been the case of the Appellant, that the Appeal was accompanied with the Certified Copy as contemplated under Rule 22 of the NCLT Rule and that the Certified Copy would be as provided under sub section 9 of section 2 of the NCLT Rules, which could be taken as to be the basis for the purpose of determining the period of limitation. The limitation to file appeal would be determined only from the date of pronouncement of the Judgment i.e, dated 31.10.2023, uploading of the Impugned on 09.11.2023 it becomes insignificant. It is admitted case of the Appellant that he has applied for the free copy only on 14.11.2023 by presenting an application before the Registry of the court. The limitation for filing an Appeal has to be considered from the date of pronouncement of Judgment and not the date on which the Appellant received the Certified Copy, but since he applied Certified Copy on 21.03.2024 the Appeal will not be within the period prescribed under Proviso sub section 2 of Section 61 of the Code. Because, the Appeal itself for its registration was presented before the Registry on 26.12.2023, that too despite of the fact, that the Appellant had already received the Free Copy on 14.11.2023. Even, according to the case of the Appellant, since he received the knowledge and the Free Copy of the Judgment was received by him on 14.11.2023, the appeal since presented on 26.03.2024, would be barred by limitation. As Condone Delay Application carries no justification as to why the Appeal was filed on 26.12.2023 i.e. beyond the prescribed period of limitation under Law. Even, according to the Appellant himself, the appeal has been filed with 12 days delay. The Appeal is barred by limitation, hence the Condone Delay Application i.e. IA No.95/2024 would stand rejected and consequences there to the Company Appeal (AT) (CH) (Ins) No.29/2024, M/s. Whitehand Services Vs M/s. RD Buildtech and Developers (Karnataka) Pvt. Ltd. would too stand rejected. Appeal dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether the period of limitation for filing an appeal under section 61 of the Insolvency and Bankruptcy Code begins from the date of pronouncement of the impugned order, the date of its uploading on the Tribunal website, the date of receipt of a 'free copy' under Rule 50 of the NCLT Rules, or the date of receipt of a certified copy as contemplated by Rule 22 and the defined meaning of 'certified'. 2. Whether a 'free copy' supplied under Rule 50 of the NCLT Rules can be treated as a 'certified copy' for the purpose of computing limitation for an appeal under section 61 and for compliance with Rule 22 of the NCLAT Rules. 3. Whether the delay in presenting the appeal (12 days pleaded; longer delays in registry dates) ought to be condoned where the appellant relied on delayed supply of free copy and later applied for certified copy beyond the statutory period. 4. Incidental: Whether the Tribunal should consider the effect of amendment to section 4 (raising pecuniary jurisdiction) for admissibility of the underlying section 9 petition (not finally decided by the Tribunal in this order). ISSUE-WISE DETAILED ANALYSIS Issue 1 - Commencement of limitation period for appeal under section 61 Legal framework: Section 61 prescribes time for filing appeals to the Appellate Tribunal; Rule 22 of the NCLAT Rules requires the appeal to be accompanied by the certified copy of the impugned order. The definition of 'certified' in Rule 2(9) of the NCLT Rules and section 76 of the Evidence Act informs what constitutes a certified copy. Interpretation and reasoning: The Tribunal holds that limitation runs from the date of pronouncement of the impugned judgment (the date of the order), and not from the date of upload or from subsequent receipt of a free copy. Uploading on the Tribunal website or receipt of a free copy does not alter the statutory commencement of limitation. The statutory regime contemplates filing within the period fixed from pronouncement, subject to the requirement that a certified copy accompany the appeal for registration. Precedent treatment: The Tribunal applied its prior decision (reported in the judgment extract) which distinguished the roles of pronouncement, free copy and certified copy, and held that limitation is computed from pronouncement. Ratio vs. Obiter: Ratio - limitation for appeal is measured from pronouncement of the order; upload/receipt dates are not the primary triggering event for limitation though they may be relevant factually in some contexts. Conclusion: Time for lodging an appeal under section 61 begins from pronouncement of the impugned order; the appellant's reliance on later events (upload/receipt) does not extend the statutory limitation. Issue 2 - Whether the 'free copy' under Rule 50 is a 'certified copy' for appeal purposes Legal framework: Rule 50 of the NCLT Rules provides for issuance of a free copy to parties; Rule 22 of the NCLAT Rules and the definition of 'certified' (Rule 2(9) of the NCLT Rules and section 76 of the Evidence Act) govern what constitutes a certified copy for filing an appeal. Interpretation and reasoning: The Tribunal reasons that the free copy issued under Rule 50 is an administrative obligation of the Registry and cannot substitute for the statutory requirement of a certified copy required under Rule 22. Rule 50 must be read in conjunction with the definition of 'certified'; issuance of a free copy does not dispense with the necessity to procure and file a certified copy (attested/verified under the statutory procedure). The free copy evidences that an order exists, but it does not satisfy the statutory precondition for filing the appeal. Precedent treatment: The Tribunal expressly follows and applies its earlier holding (extracted in the judgment) that Rule 50 cannot be interpreted disjunctively from Rule 2(9) and that a free copy is not a substitute for a certified copy. Ratio vs. Obiter: Ratio - a free copy under Rule 50 is not equivalent to a certified copy for the purposes of instituting an appeal under section 61 and Rule 22. Conclusion: The 'free copy' cannot be treated as a certified copy; an appeal cannot be registered or its limitation computed based on the free copy in lieu of obtaining the certified copy required by statute. Issue 3 - Condonation of delay where the appellant received free copy and later applied for certified copy outside the statutory window Legal framework: Section 61 prescribes the limitation; Rule 22 requires a certified copy to accompany an appeal; NCLT/NCLAT procedural rules and established judicial approach to condonation of delay (requirement of sufficient explanation and bona fide conduct) inform discretion on condonation applications. Interpretation and reasoning: Applying the legal framework and the prior holding that limitation runs from pronouncement, the Tribunal examined the chronology: pronouncement date, upload date, date of receipt of free copy, dates of application for certified copy, date of receipt of certified copy, and date of filing the appeal. The appellant applied for the certified copy well after the statutory period had expired; the appeal was presented beyond the statutory period. The Tribunal found no adequate explanation for filing the appeal late (the appellant himself pleaded only 12 days' delay but the registry records showed longer periods and inconsistent dates). Given that receipt of a free copy does not extend or restart limitation and that the certified copy application was delayed, the Tribunal concluded there was no justification to condone delay. Precedent treatment: The Tribunal adhered to its prior decision rejecting the equivalence of free copy and certified copy, thereby reinforcing the narrow scope for condonation where certification was not sought promptly. Ratio vs. Obiter: Ratio - delay will not be condoned where the appellant failed to procure the statutorily required certified copy within the statutory window and offers no satisfactory justification; reliance on receipt of a free copy is not adequate justification. Conclusion: The condonation application is rejected; the appeal is barred by limitation and therefore dismissed/held to be non-maintainable. Issue 4 (Incidental) - Effect of amendment to section 4 raising the pecuniary threshold for initiation of CIRP Legal framework and reasoning: The impugned order below rejected the section 9 petition on the ground that, after amendment to section 4 effective 24.03.2020, the minimum pecuniary threshold for initiation was raised to Rs.1 crore, thereby barring proceedings for lesser claims. The Tribunal observed this ground in the record but expressly refrained from deciding that issue in the present order because the appeal was found to be barred by limitation and the condonation application failed. Ratio vs. Obiter: Obiter in this order - the question of the amended pecuniary jurisdiction was noted but left open for consideration in a properly constituted, timely appeal or proceeding. Conclusion: The Tribunal did not adjudicate the amendment/pecuniary threshold issue in this order; the question remains open for determination in an appeal or petition not barred by limitation. Overall Disposition The Tribunal held that limitation for filing an appeal under section 61 begins from pronouncement of the impugned order; a free copy under Rule 50 is not a certified copy for the purposes of Rule 22; the appellant's failure to obtain a certified copy within the statutory period and lack of adequate justification precluded condonation of delay; consequently the appeal is barred by limitation and the condonation application is rejected. The substantive issue relating to amendment of pecuniary jurisdiction under section 4 was noted but not decided.