NCLAT condones 3-day delay in IBC Section 61(2) appeal, rules e-filing date governs limitation period

NCLAT Principal Bench allowed condonation of 3-day delay in filing appeal under IBC Section 61(2). The tribunal held that limitation period should be computed from e-filing date rather than physical presentation date at counter. Applying Supreme Court precedent that rules prevalent when application is considered govern the matter, NCLAT applied SOP dated 24.12.2022 which superseded earlier SOP dated 21.10.2022. The appellant's e-filing on 30.05.2022 was within statutory period, making physical filing delay irrelevant. Sufficient cause was established through detailed application and supporting affidavit.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Computation of limitation period for filing the appeal.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:

The primary issue addressed in the judgment is the application for condonation of a three-day delay in filing the appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016. The appellant sought condonation of delay due to the late receipt of the certified copy of the impugned order and subsequent procedural delays, including the summer holidays of the Calcutta High Court. The appellant argued that the delay was not due to negligence and should not result in punishment. The tribunal acknowledged the appellant's justification, noting that the delay was minimal and adequately explained, thus exercising its discretion under the proviso to Section 61(2) of the Code to condone the delay.

2. Computation of Limitation Period for Filing the Appeal:

A significant issue was determining whether the limitation period should be computed from the date of e-filing or the date of presentation of the hard copy of the appeal. The tribunal examined the relevant provisions of the Insolvency and Bankruptcy Code, 2016, and the National Company Law Appellate Tribunal Rules, 2016, alongside the Standard Operating Procedures (SOPs) issued by the tribunal over time.

The tribunal referred to Rule 22 of the NCLAT Rules, which mandates the presentation of an appeal in hard copy at the filing counter, and Rule 103, which allows for e-filing. The tribunal noted that SOPs issued on various dates provided differing instructions on the computation of the limitation period. The SOP dated 03.01.2021 allowed e-filing but required hard copies to be filed as per the rules. The SOP dated 21.10.2022 initially stated that the limitation period should be computed from the date of presentation of the appeal but was later withdrawn by the SOP dated 24.12.2022, which clarified that the limitation should be computed from the date of e-filing, with hard copies to be filed within seven days of e-filing.

The tribunal considered the decision of the Hon'ble Supreme Court in Sanket Kumar Agarwal & Anr. Vs. APG Logistics Pvt. Ltd., which emphasized that the rules applicable at the time of consideration of an application should be applied. Consequently, the tribunal determined that the limitation period should be computed from the date of e-filing, as per the SOP dated 24.12.2022, which was in effect at the time of considering the application for condonation of delay.

The tribunal concluded that the appeal was filed within the permissible period when computed from the date of e-filing, thereby overruling the respondent's objection that the limitation should be calculated from the date of presentation of the hard copy. The tribunal condoned the three-day delay, finding sufficient cause for the delay, and allowed the application.

Conclusion:

The tribunal's decision to condone the delay was based on the application of the SOP dated 24.12.2022, which computed the limitation period from the date of e-filing. The tribunal emphasized the importance of disposing of appeals on their merits rather than technicalities, particularly when the delay is minor and adequately justified. The appeal was scheduled for hearing on 5th November 2024.

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