2026 (3) TMI 1250 - AT - IBC

Self-contained limitation under the Insolvency Code bars late appeal against a liquidator's decision; delay could not be condoned.

Section 42 of the Insolvency and Bankruptcy Code provides its own limitation period of fourteen days for an appeal against the liquidator's decision, and ... Condonation of delay - belated appeal - Delay in filing an appeal against the liquidator's decision under Section 42 - Limitation under special statute - Applicability of Limitation Act. Appeal against decision of liquidator - Limitation under special statute - Applicability of Limitation Act - HELD THAT:- The Appellate Tribunal held that Section 42 itself prescribes the remedy, the forum, and the period within which the creditor must challenge acceptance or rejection of its claim, namely fourteen days from receipt of the decision. Section 238A applies the Limitation Act only as far as may be, and therefore cannot be read so as to override a special provision which is complete in itself on limitation and does not provide any scope for extension. The pendency of the separate CIRP appeal was held to have no nexus with proceedings under Section 42, since both operate independently; hence, such pendency could not suspend or enlarge the statutory period. On the admitted receipt of the liquidator's communication, the appeal filed long thereafter was clearly beyond time, and the plea of ignorance of remedy was also rejected. [Paras 14, 15, 17, 18, 19] The rejection of the Section 42 appeal as barred by limitation was upheld, and condonation beyond the prescribed fourteen days was held impermissible. Final Conclusion: The Appellate Tribunal held that the limitation under Section 42 of the I&B Code is absolute within the terms of that provision and cannot be extended by resort to Section 238A of the Code read with Section 5 of the Limitation Act. The appeal was accordingly dismissed as devoid of merit and barred by limitation. Issues: Whether delay in filing an appeal against the liquidator's decision under Section 42 of the Insolvency and Bankruptcy Code, 2016 could be condoned by invoking Section 5 of the Limitation Act, 1963 through Section 238A of the Insolvency and Bankruptcy Code, 2016.Analysis: The limitation under Section 42 is embedded in the provision itself, which permits an appeal only within fourteen days of receipt of the liquidator's decision. Section 238A applies the Limitation Act only so far as may be, and cannot override a special provision that contains its own complete limitation scheme. The pendency of related insolvency proceedings was held to be independent and incapable of extending the time for an appeal under Section 42. The delay was also found to be substantial and beyond the statutory framework for condonation.Conclusion: Condonation of delay was held to be unavailable, and the appeal was dismissed as barred by limitation.