2025 (7) TMI 801 - AT - IBC

Condonation of delay of 15 days in filing appeal - applicability of benefit of Section 14 of the Limitation Act 1963 - HELD THAT - It is well settled law that limitation for filing Appeal commences from the date when order is pronounced. The order dated 02.08.2024 was delivered on 02.08.2024 which is mentioned in the impugned order itself. The limitation for filing the Appeal commenced on 02.08.2024 and the limitation of 30 days shall come to an end on 01.09.2024 and 15 days period shall also come to an end on 16.09.2024. As per the observation and finding of this Tribunal in order dated 26.11.2024 for the first time the Appellant while refiling the earlier Company Appeal (AT) (Ins.) No.1877 of 2024 inserted the order dated 02.08.2024. On the date when the Appellant sought to challenge the order dated 02.08.2024 in Company Appeal (AT) (Ins.) No.1877 of 2024 period of limitation of 30 days and also the extendable period of 15 days has already come to an end. The act of the Appellant was clearly reckless and had been adversely commented by this Tribunal on 26.11.2024. Neither there was any bonafide nor it can be said that Appellant acted diligently. According to the prayers made in the application itself the delay is said to be of 117 days and present is a case where the Appellant is clearly not entitled for the benefit of Section 14 of the Limitation Act. The Hon ble Supreme Court in Tata Steel Ltd. Vs. Raj Kumar Banerjee Ors. 2025 (5) TMI 661 - SUPREME COURT has held that the NCLAT has no jurisdiction to condone the delay beyond 15 days. There is no jurisdiction to condone the delay beyond 15 days - appeal dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Tribunal in this judgment are:

(a) Whether the delay of 117 days in filing the present Appeal challenging the order dated 02.08.2024 is liable to be condoned;

(b) Whether the Appellant is entitled to the benefit of Section 14 of the Limitation Act, 1963, which allows exclusion of time spent in bona fide prosecution of earlier proceedings in a court without jurisdiction;

(c) Whether the Appellant's conduct in refiling the earlier Appeal with substitution of the impugned order constitutes bona fide prosecution with due diligence and good faith;

(d) The applicability of the limitation provisions under the Insolvency and Bankruptcy Code, 2016 (IBC), particularly Section 61(2), and the extent of the Appellate Tribunal's jurisdiction to condone delay beyond the statutory period;

(e) The legal effect of the Supreme Court's rulings on limitation computation and condonation of delay in appeals under the IBC, including the binding precedents on the limitation period commencement and the scope of condonation powers of the Appellate Tribunal;

(f) The procedural propriety and legal consequences of altering the impugned orders challenged in the Appeal during refiling without prior permission of the Tribunal;

(g) Whether the Appellant's delay condonation application is maintainable in light of the above considerations.

2. ISSUE-WISE DETAILED ANALYSIS

(a) Delay in Filing the Appeal and Condonation Application

The Appellant filed the present Appeal on 27.12.2024 challenging the order dated 02.08.2024, resulting in a delay of 117 days beyond the prescribed limitation period. The Appellant sought condonation of this delay on the ground that the earlier Appeal (Company Appeal (AT) (Ins.) No.1877 of 2024), which was initially filed challenging orders dated 29.07.2024 and 30.07.2024, was dismissed on 26.11.2024 with liberty to challenge the order dated 02.08.2024. The Appellant contended that the period from 02.08.2024 to 26.11.2024 should be excluded under Section 14 of the Limitation Act, as the earlier Appeal was bona fide prosecuted.

The Respondent opposed the condonation, arguing that the Appellant's conduct was not bona fide or diligent, highlighting that the order dated 02.08.2024 was not originally challenged but was inserted during refiling, which was improper and manipulative. The Respondent contended that the limitation period had expired before the order dated 02.08.2024 was first challenged and thus no benefit of Section 14 could be extended.

The Tribunal examined the procedural history and found that the initial Appeal was filed against orders dated 29.07.2024 and 30.07.2024 and was returned due to defects. Upon refiling on 23.09.2024, the Appellant removed the original impugned orders and substituted the order dated 02.08.2024, which was improper and against court practice. The Tribunal expressed strong disapproval of this conduct, emphasizing that once a case is filed, the record becomes part of the court record and cannot be altered without permission. This was held to be a reckless act lacking bona fides and due diligence.

Therefore, the Tribunal concluded that the Appellant was not entitled to the benefit of Section 14 of the Limitation Act, as the conditions for its applicability-particularly bona fide prosecution with due diligence-were not fulfilled.

(b) Applicability of Section 14 of the Limitation Act

The Tribunal analyzed the scope of Section 14 of the Limitation Act, which allows exclusion of time spent in bona fide prosecution of earlier proceedings in a court without jurisdiction. The Supreme Court's decision in Consolidated Engineering Enterprises was relied upon, which laid down five conditions for applicability: (1) both proceedings are civil and prosecuted by the same party; (2) earlier proceeding prosecuted with due diligence and good faith; (3) failure of earlier proceeding due to jurisdictional defect or similar cause; (4) both proceedings relate to the same matter; and (5) both proceedings are in a court.

The Tribunal found that these conditions were not met since the Appellant's earlier Appeal was not prosecuted with due diligence or good faith, as evidenced by the improper substitution of the impugned order. Further, the order dated 02.08.2024 was never initially challenged, and the insertion during refiling was a deliberate act to circumvent limitation. Hence, the Appellant was not entitled to the benefit of Section 14.

(c) Limitation Period under the Insolvency and Bankruptcy Code and Jurisdiction to Condonation

The Tribunal referred extensively to the Supreme Court's recent pronouncement in Tata Steel Ltd. v. Raj Kumar Banerjee & Ors., which clarified the limitation regime under the IBC. It was held that the limitation period for filing an appeal under Section 61(2) of the IBC commences from the date of pronouncement of the order, not the date of receipt or availability of the certified copy. The limitation period is 30 days, extendable by a maximum of 15 days upon sufficient cause.

The Supreme Court emphasized that the Appellate Tribunal (NCLAT) has no jurisdiction to condone delay beyond 15 days and that the IBC's procedural discipline is strict to ensure timely resolution of insolvency proceedings. The Court further clarified that the time taken to obtain a certified copy after filing an application can be excluded, but the time taken before such application cannot be excluded.

Applying this principle, the Tribunal held that the Appellant's appeal filed on 27.12.2024 was clearly beyond the statutory limitation period, and the Tribunal had no jurisdiction to condone the delay of 117 days, which exceeded the permissible 15-day extension.

(d) Procedural Impropriety in Refiling the Earlier Appeal

The Tribunal expressed strong displeasure at the Appellant's counsel's act of removing the originally challenged orders dated 29.07.2024 and 30.07.2024 and substituting the order dated 02.08.2024 during refiling without prior permission. This was held to violate court practice and undermine the integrity of judicial proceedings. The Tribunal emphasized that once a case is filed, the record becomes part of the court record and cannot be altered unilaterally. Such conduct was described as reckless and not in good faith, warranting dismissal of the earlier Appeal and denial of condonation in the present proceedings.

(e) Application of Law to Facts and Treatment of Competing Arguments

The Tribunal carefully examined the Appellant's submissions seeking exclusion of the period from 02.08.2024 to 26.11.2024 under Section 14 and reliance on the liberty granted by the Tribunal to challenge the order dated 02.08.2024. It rejected the argument that the earlier Appeal was bona fide prosecuted, noting the improper substitution of the impugned order and the expiry of limitation prior to the first challenge of the order dated 02.08.2024.

The Tribunal also rejected the Respondent's contention that the Appellant was not bona fide and diligent, but found that the Appellant's conduct was indeed not bona fide and lacked due diligence. The Tribunal relied on the Supreme Court's binding precedents to hold that the Appellate Tribunal cannot condone delay beyond 15 days, and that the limitation period commences from the date of pronouncement of the order.

Accordingly, the Tribunal dismissed the delay condonation application and the Appeal for want of limitation.

3. SIGNIFICANT HOLDINGS

The Tribunal made the following significant legal holdings:

"We are not inclined to punish him for this mistake but we are also not happy with the kind of attitude as to 'who bothers'. We may emphatically observe that once a case is filed online or by way of hard copy, it becomes record of the court and if the said record is given back to the parties concerned for removing the defects and for refiling, no change, at any cost can be brought about, without taking an order from the court, in case there happens to be a mistake on account of an error of omission or commission."

"The plea of misjoinder of cause of action, cannot come to an aid of the Appellant, since on 23.09.2024, the limitation to challenge the order dated 02.08.2024 has already come to an end."

"For extending the benefit of Section 14 of the Limitation Act, the conditions stipulated in Section 14 need to be fulfilled and one of the conditions is that the Plaintiff has been prosecuting the earlier proceedings with due diligence and good faith."

"The Appellant having failed to apply for a certified copy, rendered the appeal filed before NCLAT as clearly barred by limitation."

"The NCLAT has no power to condone delay beyond the period stipulated under the statute. Accordingly, the second issue is answered by us."

"Time is of the essence in statutory appeals, and the prescribed limitation period must be strictly adhered to. Even a delay of a single day is fatal if the statute does not provide for its condonation."

Core principles established include:

• Limitation for filing appeals under IBC commences from the date of pronouncement of the order;
• The Appellate Tribunal's jurisdiction to condone delay is limited to 15 days beyond the prescribed 30-day limitation period;
• Section 14 of the Limitation Act applies only when the earlier proceedings were prosecuted with due diligence and good faith;
• Unilateral alteration of the impugned order during refiling without court permission is improper and undermines judicial integrity;
• Strict adherence to limitation timelines is essential to preserve the efficacy and finality of insolvency proceedings.

Final determinations on each issue are:

• The delay of 117 days in filing the Appeal is not condonable;
• The Appellant is not entitled to the benefit of Section 14 of the Limitation Act;
• The Appellate Tribunal lacks jurisdiction to condone delay beyond 15 days under Section 61(2) of the IBC;
• The Appeal is dismissed for being barred by limitation;
• No costs are awarded.