Time-Period U/S 61 Of IBC Cannot Be Extended On Ground Of S.14 Of Limitation Act: NCLAT

The NCLAT Chennai Bench of Justices Justice Sharad Kumar Sharma and Jatindranath Swain held that the provisions contained under Section 14 of the Limitation Act will not be a recourse available to the appellant, owing to the fact that Section 61 of the IBC, since being a self-contained provision dealing with the principles of Limitation prescribes an upper limit within which an Appeal has to be filed and that cannot be extended under any circumstances even by this Appellate Tribunal. Brief Facts The Appellant in the instant company appeal has put a challenge to the Impugned Order dated 12.06.2019, & 04.11.2019, as it has been passed by NCLT, Chennai, by virtue of which and as a consequence thereto the resolution plan, submitted before it for approval was affirmed and stood approved in favour of Respondent No.3. What is peculiar in this case is that after the approval of plan in favour of Respondent No.3, by an order of 12.06.2019, the appellant sought a recall of the said order by filing of an application before the NCLT, which was also rejected by an order dated 04.11.2019. Being aggrieved against the orders of NCLT dated 04.11.2019, the appellant has preferred the Revision petitions before Hon'ble High Court of Judicature of Madras. The High Court of Madras by the judgment of 11.02.2020, dismissed the CRPs on the ground, that no direction as such could be given to the NCLT Chennai bench in exercise of its inherent powers. NCLAT's Analysis The NCLAT at the outset noted that revision petitions under Article 227 of the Indian Constitution were filed in which only order dated 04.11.2019 was challenged and not the order approving the resolution plan. It is in this context the tribunal observed that “where the appellant has opted to put a challenge only to the order of rejection of recall application dated 04.11.2019, it would amount to that he has acceded to the order of approval of the resolution plan dated 12.06.2019, and consequentially the implications of Order II Rule 2, of CPC would follow which is otherwise principally made applicable in the proceedings which are held before the NCLT or under the I & B Code.” The tribunal further observed that because at the relevant point of time when the appellant has approached the High Court of Judicature at Madras on 22.01.2020, he had a remedy available as against both the orders, but he has opted to challenge only the order of 04.11.2019 rejecting the recall. Thus, in fact, even under the principle of merger it is not available to the appellant as a consequence of the legal implications flowing from the order 04.11.2019. The tribunal further rejected the contention with respect to condonation of delay in filing the appeal on the ground that time spent in prosecuting the case before the High Court would be excluded under section 14 of the Limitation Act. The tribunal further observed that the provisions contained under Section 14 of the Limitation Act will not be a recourse available to the appellant, owing to the fact that Section 61 of the IBC, since being a self-contained provision dealing with the principles of Limitation prescribes an upper limit within which an Appeal has to be filed. The tribunal further observed that the period cannot be extended under any circumstances even by this Appellate Tribunal too. Furthermore, litigation before Hon'ble Court against rejection of a recall application which itself cannot be taken as a continuation of proceedings of the Principal proceedings, can be accepted as a bonafide litigious activity. The tribunal further observed that “in that eventuality, the provisions of Section 14, of the limitation Act, will not be attracted for the purposes of condoning the delay chanced in filing the instant Company Appeal, as against the impugned order of 12.06.2019, affirming the resolution plan in favour of Respondent No.3” The tribunal concluded that since the period of limitation has to be computed as per the provisions contained under Section 61 and since, the Company Appeal itself was preferred before this Tribunal only on 07.11.2021, the said appeal is exclusively barred by limitation and outside the upper period of limitation prescribed under Section 61, of I & B Code. Thus, the appeal would stand dismissed as it is barred by limitation as prescribed under Section 61 of the IBC Case Title: Hero Exports v. Mr. K. Vasudevan. Case Reference: IA No. 2830-2831/2020 & IA No. 3019-3020/2020 TA (AT) No.254 & 255 / 2021 (Company Appeal (AT) (Ins) Nos.1048 & 1049/2020) IA No. 2826-2827/2020 &IA No.2828-2829/2020Click Here To Read/Download The Order

Time-Period U/S 61 Of IBC Cannot Be Extended On Ground Of S.14 Of Limitation Act: NCLAT

Mohd Malik Chauhan

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