The Hon’ble Supreme Court restored an appeal back to National Company Law Appellant Tribunal (NCLAT), wherein the appellant challenged the dismissal of their interlocutory application by the National Company Law Tribunal (NCLT), by providing significant clarity on the commencement of limitation period for filing an appeal under the Insolvency and Bankruptcy Code (IBC). The Court further held that the time for filing an appeal begins only when the order, appealed from, is uploaded, emphasizing that an order is not officially pronounced until this date. This case deals with the precise moment an order is deemed pronounced and the implications for the limitation period in filing appeals.
On 17.05.2023, the NCLT heard arguments from both parties regarding an interlocutory application filed by the appellant which alleged that the second respondent had responded to the Section 7 insolvency petition under the IBC without proper authorization on behalf of the corporate debtor; however, no substantive order was passed. Subsequently, on 30.05.2023, an order was belatedly uploaded, dismissing the appellant’s application. Dissatisfied with this decision, the appellant obtained a certified copy of the order on June 1, 2023, with an intention to file an appeal against the order dated 17.05.2023; however, the 30-day appeal period concluded on June 29, 2023. Accordingly, on July 10, 2023, the appellant electronically lodged an appeal with the NCLAT, accompanied with an application seeking condonation of the delay, contending that the limitation period should begin from May 30, 2023, when they became aware of the contents of the NCLT order
The NCLAT dismissed the appeal, ruling it as time-barred and asserting that the limitation period commenced on May 17, 2023, on the basis of a Supreme Court's ruling in V. Nagarajan v. SKS Ispat & Power Ltd., (2022) 2 SCC 244, which established that the limitation period for filing an appeal starts from the date of pronouncement of the order, not from the date of its upload or the receipt of a certified copy. The Appellate Tribunal further noted that the time taken to obtain a certified copy can be excluded from the limitation period, provided the appellant applies within the specified timeframe under Section 61(2) of the IBC. Dissatisfied with the NCLAT's order the appellant challenged the decision before the Hon’ble Supreme Court.
The Supreme Court observed that the limitation period begins with the pronouncement of the judgment or order. The central issue was determining when an order is officially considered pronounced.
Referring to Rule 89(1) of the NCLT Rules, 2016, the Supreme Court noted that the NCLT registry distinguishes cases for pronouncement of orders from others in its cause list. The Rule 150(1) and Rule 151 of the NCLT Rules, delineates that after hearing the parties, the order must be pronounced either immediately or soon thereafter, within thirty days of the final hearing by a member of the Bench on behalf of the Bench, and recorded by the Court Master; making the pronouncement mandatory and non-waivable.
The Hon’ble Supreme Court concluded that the limitation period starts only when the order is uploaded, not when the hearings conclude. Since no order was issued before May 30, 2023, the appellant could not apply for a certified copy on May 17, 2023. Recognizing that the appeal was filed beyond the 30 days period but within the condonable period of 15 days extension the Court restored the appeal before the NCLAT for a reconsideration of whether the appellant had shown adequate grounds to justify condoning the delay beyond the initial 30 days.
Sanjay Pandurang Kalate v. Vistra ITCL (India) Ltd.
2023 SCC OnLine SC 1663
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