9911796707
TMI Blog2025 (5) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 assuming the benefit of Section 4 of the Limitation Act, 1963 were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pen. 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 sustainable in law. 5.1. Elaborating further, it is submitted that pursuant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LT 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 when the tribunal is closed, the filing may be done on the next working day. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. For better appreciation, the said provision is reproduced below: "S.61 - Appeals and Appellate Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 expires on the day when the court is closed. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. The period of 30 days mentioned in proviso that follows sub-section (3) of Section 34 of the 1996 Act is not the "period of limitation" and, therefore, not "prescribed period" for the purposes of making the application for setting aside the arbitral award. The period of 30 days beyond three months which the court may extend on sufficient c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved 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 of period extendable by Court in exercise of its discretion." (iv) My Preferred Transformation & Hospitality Pvt. Ltd. and Another v. Faridabad Implements Pvt. Ltd. 2025 SCC OnLine SC 70. "25. As per Section 4, if the ''prescribed period'', which is defined in Section 2(j) of the Limitation Act as the period of limitation computed in accordance with its provisions, expires on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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, which fell during the court's winter/Christmas vacation. The Court here considered the applicability of Section 4 of the Limitation Act and Section 10 of the GCA. 29.1 On the issue of Section 4 of the Limitation, it held that the issue is covered by Assam Urban(supra), where it was held that the benefit of exclusion of the period when the court is closed is only available with respect to the "prescribed period of limitation" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actors(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 condoned." Thus, it is clear that 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. 10.3. In V. Nagarajan v. SKS Ispat & Power Ltd. (2022) 2 SCC 244, this Court provided crucial clarifications regarding the computation of limitation periods under the IBC. It was held that und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 often granted for the purposes of judicial determination, they do not confer an automatic right on an applicant to dispense with compliance and render Rule 22(2) of the NCLAT Rules nugatory. The act of filing an application for a certified copy is not just a technical requirement for computation of limitation but also an indication of the diligence of the aggrieved party in pursuing the litigation in a timely fashion. In a similar factual scenario, NCLAT had dismissed an appeal as time-barred unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, this Court had an occasion to deal with the case where an application was heard by NCLT on 17.05.2023 but no order was pronounced. The Order came to be uploaded by the Registry on 30th April 2023 directly carrying the date of the Order as 17.05.2023. The appellant applied for the certified copy on 30th May 2023 which was received on 01.06.2023 and the appeal was filed in NCLAT on 10.07.2023 along with the application for condonation of delay. The issue which was dealt by this Court in this case was as to which date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 jurisdiction to entertain appeals, regardless of the reason for the delay. In Mobilox Innovations Private Limited v. Kirusa Software Private Limited (2018) 1 SCC 353, while interpreting Section 9 IBC, this Court underscores the IBC's strict procedural discipline i.e., only applications strictly conforming to statutory requirements can be entertained. This principle is also applicable to limitation issues under section 61(2), as it supports the idea that tribunals must operate within the bounds of the Code, without adding equitable o ..... 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