S. 61(2) IBC | Appeal Filed Beyond 45 Days Not Condonable By NCLAT : Supreme Court

The Supreme Court today (May 7) ruled that the National Company Law Appellate Tribunal (NCLAT), acting as the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016 (Code), has no power to condone delays in filing appeals beyond the prescribed limit of 45 (30+15) days under Section 61(2) of the Code.

Accordingly, the bench of Justices JB Pardiwala and R Mahadevan set aside the decision of the National Company Law Appellate Tribunal (NCLAT), which had improperly condoned the delay in filing an appeal beyond the mandated 45-day period.

Briefly put, the Appellant's resolution plan was approved on 07.04.2022. Hence, the 30-day limitation period for filing the appeal commenced on 07.04.2022 and expired on 07.05.2022. Notably, 07.05.2022 fell on the first Saturday of the month, which is a working day for the Registry of the NCLAT, therefore, the outer limit of 15 days apart from the initial 30 days of limitation expired on 22.05.2022.

However, an Appeal was filed before NCLAT on 23.05.2022 (e-filing) and 24.05.2022 (physical filing) by the Respondent.

Being aggrieved by the NCLAT's decision to allow the Respondent's appeal while condoning the delay for an appeal preferred beyond the stipulated period of 45 days, the Appellant appealed to the Supreme Court.

Before the Supreme Court, the appellant contended that the NCLAT had erred in condoning the delay, as the appeal filed after 22.05.2022 was time-barred and could not be entertained unless expressly permitted under the provisions of the Insolvency and Bankruptcy Code.

Per contra, the Respondent argued that the limitation period for filing an appeal commenced from 08.04.2022 (since the order was disclosed to stock exchanger), and since the 30th day i.e., 08.05.2022 was Sunday (Court Holiday), therefore by virtue of Section 4 of the Limitation Act, 1963 (the period of limitation is extended to next working day when the day of expiry of limitation was holiday), the outer limit of 15 days would be reckoned from next date of the opening of the Court i.e., 09.05.2022. Hence, the appeal filed on 24.05.2022 was within the limitation.

Rejecting the Respondent's argument, the judgment authored by Justice Pardiwala stated that the period of limitation begins from the date of pronouncement of order/judgment, and since the resolution plan was approved on 07.04.2022, therefore the period of limitation ought to be reckoned from 07.04.2022, which expired on 07.05.2022, and the subsequent 15 days limitation would have expired on 22.05.2022.

Thus, the Court noted that the Respondent cannot seek protection under Section 4 of the Limitation Act as the prescribed period of 30 days expired on a working day of the NCLAT and not on a holiday.

“the limitation period for filing the appeal commenced on 07.04.2022 and expired on 07.05.2022. Notably, 07.05.2022 fell on the first Saturday of the month, which is 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 No. 1 filed the appeal beyond not only the prescribed period of 30 days but also the condonable period of 15 days, i.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.”, the court said.

Further, on the aspect of whether the NCLAT have the authority to condone the delay beyond 45 days, the Court relying on the case of Kalpraj Dharamshi v. Kotak Investment Advisors Limited & Another, (2021) 10 SCC 401 clarified that “the NCLAT cannot condone any delay beyond 15 days even on equitable grounds; and that the appellate mechanism under IBC is strictly time-bound by design to preserve the speed and certainty of the insolvency resolution process.”

“Even a delay of a single day is fatal if the statute does not provide for its condonation. As held by us, the NCLAT has no power to condone delay beyond the period stipulated under the statute. Allowing condonation in such cases would defeat the legislative intent and open the floodgates to belated and potentially frivolous petitions, thereby undermining the efficacy and finality of the appellate mechanism.”, the court said.

Accordingly, the appeal was allowed.

Case Title: TATA STEEL LTD  VERSUS RAJ KUMAR BANERJEE & ORS.

Citation : 2025 LiveLaw (SC) 542

Click here to read/download the judgment

Appearance:

For Appellant(s) Mr. Ramji Srinivasan, Sr. Adv. Mr. Ashok Mathur, AOR Mr. Udit Mediratta, Adv. Mr. Shivkrit Rai, Adv. Ms. Apeksha Singh, Adv. Mr. Arjun Bhatia, Adv. Ms. Shefali Munde, Adv.

For Respondent(s) Mr. Brijesh Singh Bhaduriya, Adv. Mr. Aviral Kapoor, Adv. Ms. Sonal Alagh, Adv. Mr. Divyanshu Jha, Adv. Mr. Vedant Singh, Adv. Ms. Shagufa Salim, AOR Ms. Ekta Choudhary, AOR Mr. Anand Krishna, Adv. Mr. Ayush Kumar, Adv.