TaxTMI 
TaxTMI 
2025 (5) TMI 661
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....he National Company Law Tribunal For short, "NCLT", Kolkata, by order dated 07.04.2022 in CP(IB)/1214(KB)/2018. Respondent No.1 is an erstwhile minority shareholder of the Corporate Debtor. 3. Respondent No.1 preferred an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 For short, "IBC" to set aside the order dated 07.04.2022 passed by the Adjudicating Authority and direct the Resolution Professional to scrutinise the resolution plan proposed by the appellant in accordance with Section 30(2) IBC. Along with the appeal, he also filed an interlocutory application bearing No. 1667 of 2022 praying for condonation of delay of 15 days in filing the same. By the order impugned herein, the NCLAT condoned the delay and allowed the said application. Aggrieved by the same, the appellant is before us with the present appeal. 4. According to the learned counsel for the appellant, the NCLT passed the order approving the appellant's resolution plan for the Corporate Debtor under Section 31 IBC on 07.04.2022. In terms of Section 61(2) IBC, the limitation period of 30 days for filing an appeal against the said order expired on 07.05.2022, which fell on a Saturday. Even assu....
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....y for filing falls on a working Saturday, and the court registry is open. It has been judicially recognized that while Saturday may be a non-working day for the judges, it remains a working day for the registry. Therefore, if the last date for filing falls on such a Saturday, the benefit of Section 4 cannot be invoked. In the present case, 07.05.2022 was the first Saturday of May, 2022 and was a working Saturday for the Registry of the NCLAT. Hence, Respondent No.1 could have filed the appeal on that date, but failed to do so. 4.4. Thus, according to the learned counsel, the order of the NCLAT condoning the delay in filing the appeal beyond the statutorily permissible period of 30 days, and the additional condonable period of 15 days under the proviso to Section 61(2) IBC, is contrary to established legal principles and the scheme of the IBC, and is therefore liable to be set aside. 5. On the contrary, the learned counsel for Respondent No.1, at the outset, submitted that the appeal filed by Respondent No. 1 before the NCLAT is well within the statutorily condonable period of 15 days as mentioned in the proviso of Section 61(2) IBC and hence, the order impugned herein is sust....
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....ation to intimate the stock exchanges at least two working days prior to the NCLT hearing, in which, the resolution plan was to be considered. This mandatory requirement was not complied with by the Corporate Debtor or the Resolution Professional. In view of these lapses, the limitation period did not commence from 07.04.2022, the date of the NCLT order, but from 08.04.2022, when the disclosure was finally made. This disclosure was the first time Respondent No.1 became aware of the approval of the resolution plan, and hence, the right to appeal accrued only from that date. 5.4. According to the learned counsel, the provisions of the Limitation Act, 1963 are applicable to the present case. It is reiterated that the limitation period commenced only after 08.04.2022 i.e., the date on which the appellant made the mandatory disclosure of the approval order to the stock exchanges and not from 07.04.2022, the date of passing of the approval order by the NCLT. The 30-day limitation period thus commenced on 08.04.2022 and expired on 08.05.2022 which was a Sunday. In view of section 4 of the Limitation Act, 1963, and Rule 3 of the NCLAT Rules, when the prescribed period expires on a day w....
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....garding the NCLT order within the prescribed period of 30 minutes - at 11.06.13 A.M. to NSE and 11.11.51 AM to BSE - following the pronouncement of the NCLT order. Therefore, the Resolution Professional fully complied with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 7. Having considered the arguments advanced and the documents on record, the central issues for adjudication are: (i) Whether the appeal filed by Respondent No. 1 was within the prescribed limitation period of 30 days, along with the additional condonable period of 15 days as provided under section 61(2) IBC; and (ii) If not, whether the NCLAT has the power to condone the delay beyond the said prescribed and condonable period under the IBC. ISSUE NO. 1 8. Concededly, the resolution plan submitted by the appellant in respect of the Corporate Debtor was approved by the Committee of Creditors on 05.06.2021 and subsequently, by the NCLT, Kolkata, by order dated 07.04.2022. Any appeal, if aggrieved by the said approval, ought to have been filed before the NCLAT in accordance with the provisions of section 61(2) IBC, which prescribes a strict timeline for the same. ....
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....ng the appeal. 10. Pertinently, Section 238A IBC which was inserted by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, makes the Limitation Act, 1963 applicable to IBC proceedings, and the same reads as under: "238A. Limitation - The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to the proceedings or appeals before the Adjudicating Authority, the National Company Law Appellate Tribunal, the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal, as the case may be." 10.1. Now, the relevant provisions of the Limitation Act, 1963 - namely Section 2(j), which defines the term 'period of limitation' and Section 4, which deals with the expiry of the prescribed period on a holiday - are extracted below: "Section 2 - Definitions In this Act, unless the context otherwise requires, - (j) "period of limitation" means the period of limitation prescribed for any suit, appeal or application by the Schedule, and "prescribed period" means the period of limitation computed in accordance with the provisions of this Act". "Section 4 - Expiry of prescribed period when court is clo....
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....stmas vacation, 2003 is extended and the appellants get the benefit of that period over and above the cap of thirty days as provided in Section 34(3), then the view of the High Court and the District Judge cannot be sustained. But this would depend on the applicability of Section 4 of the 1963 Act. 11. The question, therefore, that falls for our determination is whether the appellants are entitled to extension of time under Section 4 of the 1963 Act in the above facts. 12. Section 4 of the 1963 Act reads as under: "4. Expiry of prescribed period when court is closed.-Where the prescribed period for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the day when the court reopens. Explanation.- A court shall be deemed to be closed on any day within the meaning of this section if during any part of its normal working hours it remains closed on that day." The above section enables a party to institute a suit, prefer an appeal or make an application on the day the court reopens where the prescribed period for any suit, appeal or application expire....
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...."prescribed period" appearing in Section 4 cannot be construed to mean anything other than the period of limitation. Any period beyond the prescribed period, during which the court or tribunal has the discretion to allow a person to institute the proceedings, cannot be taken to be "prescribed period". 22. In Assam Urban Water Supply & Sewerage Board v. Subash Projects & Mktg. Ltd.[(2012) 2 SCC 624 : (2012) 1 SCC (Civ) 831], this Court dealt with the meaning of the words "prescribed period" in paras 13 and 14 as follows: (SCC pp. 627-28) "13. The crucial words in Section 4 of the 1963 Act are "prescribed period". What is the meaning of these words? 14. Section 2(j) of the 1963 Act defines: "2. (j)"period of limitation" which means the period of limitation prescribed for any suit, appeal or application by the Schedule, and "prescribed period" means the period of limitation computed in accordance with the provisions of this Act." Section 2(j) of the 1963 Act when read in the context of Section 34(3) of the 1996 Act, it becomes amply clear that the prescribed period for making an application for setting aside arbitral award is three months. ....
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.... 2-1-2004, the appellants made application for setting aside the award under Section 34 of the Arbitration Act. Considering the aforesaid facts and thereafter considering Sections 2(j) and 4 of the Limitation Act, 1963, this Court observed and held and concluded in paras 11 to 15 as under: (Assam Urban case) ..... 53. Therefore, as such the question involved in the present appeal is squarely answered against the appellant and the said issue is as such not res integra. ..... 58. Therefore, in light of the application of the Limitation Act, 1963 to the proceedings under the Arbitration Act and when Section 10 of the General Clauses Act, 1897 specifically excludes the applicability of Section 10 to any act or proceeding to which Limitation Act, 1963 applies and in light of the definition of "period of limitation" as defined under Section 2(j) read with Section 4 of the Limitation Act and as observed and held by this Court in Assam Urban, benefit of exclusion of period during which the Court is closed shall be available when the application for setting aside award is filed within "prescribed period of limitation" and shall not be available in respect....
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....cluded by an express provision in Section 34(3). While the Court did not explicitly deal with whether Section 4 of the Limitation Act was excluded, a reading of the entire judgment makes it clear that the Court proceeded on the basis that Section 4 applies. Therefore, we find it difficult to accept Mr. Kaul's submission that Section 4 was held to be excluded in Assam Urban (supra). His further submission that once the Limitation Act is inapplicable, there was no occasion for the Court to decide on the applicability of Section 4 only to the prescribed period of 3 months, must also be rejected for the same reason. 28. The position of law after Assam Urban(supra) is that while Section 4 of the Limitation Act applies to Section 34(3) of the ACA, it only applies in relation to the prescribed period of 3 months. It does not apply when the condonable period of 30 days expires on a day when the court is not working. 29. This position of law was subsequently considered and reiterated in Bhimashankar(supra) as well. Here, the arbitral award was made on 24.08.2016, the 3-month period of limitation expired on 24.11.2016, and further 30 days came upto 24.12.2016, ....
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....was raised by Mr. Kaul, does not in fact exist. The judgment is consistent throughout, in that it necessarily affirms the applicability of Section 4 of the Limitation Act while calculating limitation under Section 34(3), and consequently, relies on the proviso of Section 10 of the GCA to hold that Section 10 of the GCA does not apply. 31. The applicability of Section 4 of the Limitation Act is also implicit in the recent decision in State of West Bengal v. Rajpath Contractors(supra). Here, the award was served on the appellant on 30.06.2022. The 3-month limitation was reckoned from 01.07.2022, which came upto 30.09.2022. The court vacation started from 01.10.2022. The further 30-day period ended on 30.10.2022, which was during the court vacation. The application was filed on 31.10.2022. The Court held that the prescribed limitation period ended on 30.09.2022, when the court was working. Hence, by referring to Assam Urban(supra), it held that the appellant could not benefit from Section 4 of the Limitation Act as only the 30-day period expired on a court holiday. Hence, it held that the application was filed beyond the time under Section 34(3) and the delay could not be con....
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....n wishing to file an appeal is expected to file an application for a certified copy before the expiry of the limitation period, upon which the "time requisite" for obtaining a copy is to be excluded. However, the time taken by the court to prepare the decree or order before an application for a copy is made cannot be excluded. If no application for a certified copy has been made, no exclusion can ensue. In fact, the Explanation to the provision is a clear indicator of the legal position that the time which is taken by the court to prepare the decree or order cannot be excluded before the application to obtain a copy is made. It cannot be said that the right to receive a free copy under Section 420(3) of the Companies Act obviated the obligation on the appellant to seek a certified copy through an application. The appellant has urged that Rule 14 of the NCLAT Rules empowers NCLAT to exempt parties from compliance with the requirement of any of the rules in the interests of substantial justice, which has been typically exercised in favour of allowing a downloaded copy in lieu of a certified copy. While it may well be true that waivers on filing an appeal with a certified copy are oft....
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....rtified copy being annexed to an appeal, which continues to bind litigants under IBC. While it is true that the tribunals, and even this Court, may choose to exempt parties from compliance with this procedural requirement in the interest of substantial justice, as reiterated in Rule 14 of the NCLAT Rules, the discretionary waiver does not act as an automatic exception where litigants make no efforts to pursue a timely resolution of their grievance. The appellant having failed to apply for a certified copy, rendered the appeal filed before NCLAT as clearly barred by limitation." 10.3.1. This Court in Sanjay Pandurang Kalate v. Vistra ITCL India Ltd. & Others (2024) 3 SCC 27, has pointed out that the date on which the limitation begins to run is intrinsically linked to the date of pronouncement. After referring to this decision, this Court in A. Rajendra v. Gonugunta Madhusudhan Rao & Others 2025 SCC OnLine SC 721, has clearly stated that where the judgment was pronounced in open Court, the period of limitation starts running from that very day. The following paragraphs are relevant in this regard: "23. In Sanjay Pandurang Kalate v. Vistra ITCL India Pvt. Ltd. & Others, t....
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....e., on 24.05.2022. In view of the same reason, Rule 3 of the NCLAT Rules, 2016 has also no application to the facts of the present case. Thus, applying the principles laid down in the decisions referred to above, we arrive at the irresistible conclusion that Respondent No. 1 filed the appeal beyond the statutory maximum period of 45 days prescribed under section 61(2) IBC. Accordingly, the first issue is answered by us. ISSUE NO. 2 11. As indicated above, the IBC prescribes strict timelines for filing appeals and taking legal action so as to ensure that insolvency proceedings are not misused to recover time-barred debts. The proviso to Section 61(2) clearly limits the NCLAT's jurisdiction to condone delay only up to 15 days beyond the initial 30-day period. Where a statute expressly limits the period within which delay may be condoned, an Appellate Tribunal cannot exceed that limit. In other words, the NCLAT being a creature of statute, operates strictly within the powers conferred upon it. Unlike a civil suit, it lacks inherent jurisdiction to extend time on equitable grounds. 11.1. Once the prescribed and condonable periods (i.e., 30 + 15 days) expire, the NCLAT has no j....