NCLAT do not have power to condone the delay beyond the prescribed and condonable period under the IBC – Supreme Court
In a recent judgment, Hon’ble Supreme Court held that under IBC 2016 once the prescribed and condonable periods (i.e., 30 + 15 days grace) expire, the NCLAT has no jurisdiction to entertain appeals, regardless of the reason for the delay.
ABCAUS Case Law Citation:
4551 (2025) (05) abcaus.in SC
Important Case Laws relied upon by Parties:
Assam Urban Water Supply & Sewerage Board vs. M/s. Subash Projects & Mktg. Ltd
V. Nagarajan vs. SKS Ispat & Power Ltd.
Bhimashankar Sahakari Sakkare Karkhane Niyamita vs. Walchandnagar Industries Limited
Sagufa Ahmed and Others v. Upper Assam Plywood Products (P) Ltd. & Others
In the instant case the appellant had filed an appeal against the order passed by the National Company Law Appellate Tribunal (NCLAT) allowing interlocutory application filed by an erstwhile minority shareholder of the Corporate Debtor (Respondent) seeking condonation of delay in filing the appeal.
The appellant was the successful resolution applicant for a Corporate Debtor having its resolution plan approved by the Committee of Creditors and subsequently by the National Company Law Tribunal (NCLT).
The Respondent preferred an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC 2016) to set aside the order passed by the NCLT 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 praying for condonation of delay of 15 days in filing the same. By the impugned order, the NCLAT had condoned the delay and allowed the said application.
The appellant contended that in terms of Section 61(2) IBC, the limitation period of 30 days for filing an appeal against the said order had already expired, which fell on a Saturday. Even assuming the benefit of Section 4 of the Limitation Act, 1963 were available, the additional / grace/ condonable period of 15 days as provided under the proviso to Section 61(2), had expired. Therefore, the right of Respondent to file an appeal stood extinguished.
It was submitted that the Respondent had e-filed the appeal along with an application for condonation of delay before the NCLAT, on the 46th day from the date of the NCLT’s order. The physical filing of the appeal was done one day later i.e., on the 47th day. Accordingly, the appeal was clearly barred by limitation and not maintainable in law. However, by the order impugned herein, the NCLAT erroneously allowed the application for condonation of delay by observing that Respondent was entitled to the benefit of Section 4 of the Limitation Act, 1963.
It was argued that NCLAt incorrectly held that the 30-day limitation period for filing the appeal expired two days later, on the ground that the last day of limitation was a Saturday and, therefore, a court holiday. Consequently, the NCLAT wrongly computed the additional / grace/ condonable period of 15 up to Monday and concluded that this period had not expired on the date on which Respondent physically filed the appeal before the NCLAT.
The Hon’ble Supreme Court observed that 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. Section 2(j) defines the term ‘period of limitation’ and Section 4, deals with the expiry of the prescribed period on a holiday. The same is also highlighted under Rule 3 of the NCLAT Rules, 2016. These provisions clarify that the benefit of Section 4 of the Limitation Act, 1963 and Rule 3 of the NCLAT Rules, 2016, extends the limitation period to the next working day, if the prescribed period expires on a holiday.
The Hon’ble Supreme Court further noted that at the same time, Hon’ble Supreme Court in several decisions, categorically explained the meaning of the term ‘prescribed period’ as defined under Section 2(j) of the Limitation Act, 1963, and clarified the scope and applicability of Section 4 of the said Act, particularly, in cases where the last date for filing an appeal or application falls on a court holiday. According to the law laid down in these decisions, the benefit of exclusion of period during which the court is closed shall be available when the application is filed within “prescribed period of limitation” and shall not be available in respect of period extendable by court in exercise of its discretion.
It was further observed that the Court had provided crucial clarifications regarding the computation of limitation periods under the IBC. It was held that under section 61(2) IBC, the limitation period for filing an appeal to the NCLAT commences from the date of pronouncement of the order by the NCLT, not from the date when the order is received or made available to the aggrieved party. This Court further clarified that while Rule 22(2) of the NCLAT Rules mandates the filing of a certified copy of the impugned order along with the appeal, the limitation period is not contingent upon the receipt of such a copy. However, if an appellant applies for a certified copy, the time taken to obtain it can be excluded from the limitation period under section 12(2) of the Limitation Act. Thus, this decision underscores the IBC’s objective of ensuring timely resolution of insolvency proceedings and the parties are expected to act diligently and within the prescribed timelines, with limited scope for condonation of delay.
Further in yet another decision, the Court had held that the date on which the limitation begins to run is intrinsically linked to the date of pronouncement. After referring to this decision, the Court had clearly stated that where the judgment was pronounced in open Court, the period of limitation starts running from that very day.
In the instant case, the Hon’ble Supreme Court observed that Respondent was neither a party to the proceedings before the NCLT nor privy to the CoC deliberations, and became aware of the order only upon its subsequent disclosure. The Company Secretary of the Corporate Debtor duly informed the listing departments of both NSE and BSE about the NCLT order within 30 minutes of its pronouncement. Hence, the limitation period for filing the appeal commenced on the same date order was pronounced and expired within next thirty days. Since, the last day of limitation fell on the first Saturday of the month, which was a working day for the Registry of the NCLAT. Even otherwise, the benefit of section 4 of the Limitation Act, 1963 cannot be granted, as Respondent filed the appeal beyond not only the prescribed period of 30 days but also the condonable period of 15 days.
The Hon’ble Supreme Court concluded that the Respondent had filed the appeal beyond the statutory maximum period of 45 days prescribed under section 61(2) IBC.
Secondly, the Hon’ble Supreme Court observed that 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.
The Hon’ble Supreme Court held that once the prescribed and condonable periods (i.e., 30 + 15 days) expire, the NCLAT has no jurisdiction to entertain appeals, regardless of the reason for the delay.
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