2026 (3) TMI 156 - AT - IBC

Condonation of delay under Section 198 cannot extend the statutory appeal period under Section 61(2).

Whether a general condonation power aimed at Board delays can extend the specially prescribed appeal timeline was addressed: the provision authorising ... Condonation of delay under Section 61 of the IBC - delay of 103 days in filing an appeal - scope of Section 198 regarding condonation of delay by the Adjudicating Authority - locus of the Insolvency and Bankruptcy Board of India to file an appeal. Condonation of delay under Section 61 of the IBC - scope of Section 198 regarding condonation of delay by the Adjudicating Authority - HELD THAT: - Section 61(2) prescribes a 30 day period for filing appeals, with a discretionary extension by this Tribunal of up to 15 days. Section 198 empowers the relevant Adjudicating Authority to condone delay where the Board fails to perform an act within a period specified under the Code; it is engrafted to address delays in the Board's performance of time bound statutory functions (for example, the ten day timelines in Sections 16(4), 27(4)/(6) and 82(4)). The non obstante opening of Section 198 is contextual and confined to condonation of delays in performance of Board functions governed by the Code, and does not operate so as to enlarge this Tribunal's statutory power to condone appeals beyond the maximum period permitted by Section 61(2). Although this Tribunal can, in general, exercise some jurisdiction similar to the Adjudicating Authority, the specific purpose and object of Section 198 indicate it was not intended to override the limitation scheme for filing appeals under Section 61. The present delay of 103 days therefore exceeds the maximum condonable period under Section 61(2) and cannot be cured by invoking Section 198. [Paras 4, 10, 11, 20, 26] Delay of 103 days cannot be condoned; IA No.391 of 2026 and the memo of appeal are rejected on limitation grounds. Locus of the Insolvency and Bankruptcy Board of India to file an appeal - Whether the IBBI has locus to file an appeal against an order of the Adjudicating Authority. - HELD THAT: - While the present determination turns on limitation, the Tribunal accepted the settled proposition that the IBBI, being a statutory regulator entrusted with wide powers under the Code (for example Section 196 and other provisions), cannot be denied locus to file an appeal when it is aggrieved by an order. The Court expressly refrained from deciding ancillary consequences of locus for the merits of the appeal, confining its observation to recognition of the Board's entitlement to be an aggrieved party for purposes of filing appeals. [Paras 25] The IBBI's locus to file an appeal when aggrieved is recognised, but that recognition does not overcome the limitation bar in this case. Final Conclusion: The application for condonation of delay is rejected as the appeal was filed beyond the maximum condonable period under Section 61(2); consequently the memo of appeal is dismissed. The Tribunal noted, without deciding merits, that the IBBI has locus to appeal when aggrieved. Issues: Whether the Appellate Tribunal can condone a delay of 103 days in filing an appeal under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 by invoking or relying upon Section 198 of the Insolvency and Bankruptcy Code, 2016.Analysis: Section 61(2) prescribes a thirty day period for filing appeals with a discretionary condonable extension not exceeding fifteen days. Section 198 empowers the relevant Adjudicating Authority to condone delay where the Board fails to perform an act within a period specified under the Code; its scope relates to regulatory or administrative functions of the Board performed within timeframes specified in the Code. The text, context and scheme of the Code show Section 198 is directed to condonation of delays in performance of functions entrusted to the Board and intended to prevent such delays from being fatal to proceedings; it is not a general provision to override limitation periods for appeals before the Appellate Tribunal. While the Appellate Tribunal may exercise certain powers akin to the Adjudicating Authority in appropriate contexts, Section 198 was not enacted to displace the specific limitation regime of Section 61(2) governing appeals. The Tribunal examined authorities on purposive construction and locus of the Board but found no provision requiring the Board to file appeals within the time prescribed by Section 61(2) or permitting Section 198 to enlarge the statutory appeal period beyond the limits set by Section 61(2).Conclusion: The delay of 103 days in filing the appeal cannot be condoned by the Appellate Tribunal under Section 198; the application for condonation is rejected and the appeal is rejected (in favour of the Respondent).