NCLAT rejects appeal filed 26 days late, confirms no jurisdiction to condone delays exceeding 15 days

The NCLAT Principal Bench rejected an appeal filed 26 days beyond the statutory limit. The appellant argued they learned of the order only on 30.03.2024, making their 22.04.2024 appeal timely from that date. However, the tribunal held that limitation begins from the order's pronouncement date (26.02.2024), not when the appellant gained knowledge. Citing SC precedent in National Spot Exchange Limited v. Anil Kohli, the NCLAT confirmed it lacks jurisdiction to condone delays exceeding 15 days. The condonation application and appeal memo were both rejected.

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Issues Involved:

1. Condonation of delay in filing the appeal.
2. Validity of substituted service of notice.
3. Jurisdiction of the Appellate Tribunal to condone delay beyond the statutory period.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:

The primary issue was whether the Appellant made a case for condoning a 26-day delay in filing the appeal. The Appellant argued that the delay should be condoned as the appeal was filed within 30 days from the date of knowledge of the order, which was acquired on 30.03.2024. However, the Tribunal held that the limitation for filing an appeal begins from the date the order is pronounced by the Adjudicating Authority, which was 26.02.2024 in this case. The Tribunal emphasized that its jurisdiction to condone delay is limited to 15 days beyond the initial 30-day period as per Section 61(2) of the Insolvency and Bankruptcy Code (IBC), and thus, it could not condone the 26-day delay. The Tribunal referenced the Supreme Court's decision in "National Spot Exchange Limited. Vs. Anil Kohli" to support its conclusion that it lacks jurisdiction to condone delays exceeding 15 days.

2. Validity of Substituted Service of Notice:

The Appellant contended that the notice in the Section 95 application was not properly served, as it was sent to an outdated address, and the Appellant was unaware of the proceedings. The Appellant argued that the bank was aware that the address was no longer valid and that the substituted service via newspaper publication was invalid as there was no basis to suggest the Appellant was avoiding service. The Tribunal noted that the Adjudicating Authority had directed substituted service after notices sent to the Appellant's last known address were returned unserved. The Tribunal found that the substituted service was adequately performed through newspaper publications, and the Adjudicating Authority had set the Appellant ex-parte after being satisfied with the service.

3. Jurisdiction of the Appellate Tribunal to Condon Delay Beyond the Statutory Period:

The Tribunal reiterated that its jurisdiction to condone delay is strictly limited to 15 days beyond the 30-day appeal period, as per the statutory framework of the IBC. The Tribunal cited the Supreme Court's interpretation in "V Nagarajan Vs. SKS Ispat & Power Limited & Ors." which clarified that the omission of the phrase "from the date on which a copy of the order is made available" in Section 61(2) indicates the legislature's intent to enforce strict timelines to facilitate timely resolution under the IBC. The Tribunal emphasized that this statutory limitation on condoning delays is a consistent legislative signal to encourage proactive litigation and timely appeals.

Conclusion:

The Tribunal concluded that the application for condonation of the 26-day delay in filing the appeal could not be entertained due to the statutory limitation on its jurisdiction. Consequently, the memo of appeal was also rejected. The Tribunal's decision underscores the importance of adhering to statutory timelines and the limited scope for judicial discretion in condoning delays under the IBC framework.

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