NCLAT New Delhi: Limitation To File Appeal Commences On The Order Pronouncement Date And Not When Aggrieved Party Becomes Aware Of Its Content

The Appellate Tribunal held that the Limitation for filing of the Appeal does not commence on the date when the Appellant became aware of the contents but it shall commence when the order was pronounced.

Background Facts:

The Appeal has been filed against the order dated 08.05.2023 passed by the NCLT Kolkata on 04.07.2023. It is stated that the copy of the order was neither provided to the Appellant nor uploaded on the website. The copy of the order was e-mailed to the Appellant on 02.06.2023.

The Appeal has been filed against the order dated 12.01.2023 passed by NCLT Mumbai on 11.03.2023. It is stated that the impugned order was passed on 12.01.2023 and the Appellant applied a certified copy of the order on 06.02.2023 and a certified (free of cost) copy was received by the Appellant on 08.02.2023.

NCLAT Verdict:

The NCLAT dismissed the applications and held that the Limitation for filing of the Appeal does not commence on the date when the Appellant became aware of the contents but it shall commence when the order was pronounced.

The Tribunal observed that an order was pronounced by the NCLTs as per the Statutory Rules i.e., National Company Law Tribunal Rules, 2016 in the presence of Counsel for the Appellant. This shows that Appellants had knowledge of the order and it is not open for the Appellant to argue that they were not aware of the contents of the order. Knowledge of the order has to be actual or constructive knowledge and when the orders are pronounced, it can very well be said that the constructive knowledge has to be imputed to the contents of the order to an aggrieved party.

It relied on the Supreme Court case of V. Nagarajan vs. SKS Ispat and Power Limited and Ors. wherein it was held that in Section 421(3) of the Companies Act, 2013, the Appeal was to be filed from the date when the copy of the order of the NCLT is made available to the person aggrieved which expression is omitted in Section 61 of the Insolvency and Bankruptcy Code, 2016.

The Tribunal pointed out that even if an aggrieved party is expected to file an appeal, the party has to be pro-active and has to apply for a certified copy of the order. The limitation commenced once the order was pronounced.

Further, it is the scheme of the Limitation Act, 1963 which has been held to be applicable in the IBC proceeding. Law, thus, clearly provides opportunity to any aggrieved party to obtain certified copy of the order and file an appeal after exclusion of the period obtaining in certified copy of the order. Legislative scheme takes care of all situations where order was pronounced by a Court, it is expected for the parties to diligently apply for a certified copy of the order in the event there may be any chance to file an appeal.

In conclusion, the NCLAT observed that there is proof of Counsel’s appearance. Further, the limitation shall not commence when the Appellant comes to know of the contents of the order. The appeal was filed on 04.07.2023 i.e. after 15 days from the expiry of limitation i.e., with a delay of 27 days, and is beyond the jurisdiction of the Appellate Tribunal. Thus, the Delay Condonation Application cannot be allowed.

Further, in the second case, the Limitation for filing the appeal began on 12.01.2023, and had applied for a certified copy on 06.02.2023 and received the same on 08.02.2023. Appeal has been filed on 11.03.2023 even after giving an exclusion of 3 days, period of 45 days shall come to an end by 02.03.2023, hence, the appeal has been filed with a delay of more than 15 days after the expiry of the limitation.

Case Title: Raiyan Hotels and Resorts Pvt. Ltd. vs. Unrivalled Projects Pvt. Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 1071 of 2023

Counsel for Appellant: Mr. Dhruba Mukherjee, Sr. Advocate with Mr. Abhijeet Sinha, Mr. Kumar Anurag Singh, Mr. Anando Mukherjee, Mr. Shyama Prasad, Mr. Saikat Sarkar Chattopadhyay, Mr. Zain A. Khan and Mr. Morigana Shikhar, Advocates.

Counsel for Respondent: Mr. Shaunak Mitra, Mr. Kunal Mimani, Mr. Debayan Sen, Mr. Kartikey Bhatt, Mr. Gaurav Khatri, Advocates.

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