Limitation Period For Appeal Under Section 61 IBC Starts Running From Date Of Pronouncement; Delay In Uploading Won't Exclude Limitation : Supreme Court

The Supreme Court has held that the period of limitation for filing of appeal against an order as per Section 61 of the Insolvency and Bankruptcy Code will start running as soon as the same is pronounced, and that it is not dependent on the date when the order is uploaded.So, a party who failed to file an application for the certified copy of the order immediately cannot raise a plea to extend the period of limitation on the ground of delay in uploading the order.The Court held that period awaiting the receipt of a free certified copy does not extend the limitation period under Section 61(2) of the IBC for a party who has not applied for the same.The Court held that a diligent litigant is expected to apply for the certified copy immediately. 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, the bench of Justices DY Chandrachud, Vikram Nath and BV Nagarathna observed.The Supreme Court also held that annexation of a certified copy for an appeal to the NCLAT against an order passed in a proceedings the Insolvency and Bankruptcy Code, 2016, cannot be automatically dispensed with. If an application has been filed, the period between the date of application and the date of receipt of order can be excluded from limitation as per Section 12 of the Limitation Act.The litigant has to file the appeal within thirty days, which can be extended up to a period of fifteen days, upon showing sufficient cause and no more, the court added.BackgroundThe subject order was pronounced by the NCLT on December 31, 2019. The corrected copy of the order was uploaded only on March 20, 2020. The appellant applied for a free copy on March 23, 2020, and claims that the same has not been received. However, by the time the application for certified copy was made, the period of limitation for filing the appeal was already over on February 14, 2020.The appeal before the NCLAT was filed on 8 June 2020 with an application for exemption from filing a certified copy of the order as it had not been issued. NCLAT relied on Section 61(2) of the IBC which mandates a limitation period for appeals to be thirty days, extendable by fifteen days, to hold that the appeal filed under Section 61(1) was barred by limitation. The NCLAT also noted that the appellant did not produce any evidence to show that the certified copy has not been issued to him.Appellant's ContentionsChallenging the NCLAT order, the appellant approached the Supreme Court. The main contention was that the clock of limitation will start running only after the issuance of the certified copy of the order. Section 420(3) of the Companies Act read with Rule 50 of the NCLT Rules mandates a free copy of an order to be issued to every party. This obviates the need for any party to obtain a certified copy of an order it seeks to impugn by way of an appeal. Therefore, the clock of limitation under Section 61 of the IBC would run from the date the free copy is issued to the party. The mere absence of the words "from the date on which a copy of the order of the Tribunal is made available to the person aggrieved" in Section 61(2) of the IBC, in contradistinction to Section 421(3) of the Companies Act, has no material bearing since an appeal cannot be filed without a copy of the order.Rule 22 of the NCLAT Rules mandates a certified copy of the order for filing an appeal. However, Rule 14 of the NCLAT Rules permits a waiver from compliance with any of the rules, which has been usually granted in case of a downloaded online copy, in lieu of a certified copy of the order.Issues ConsideredThus the issues raised before the court were: (i) when will the clock for calculating the limitation period run for appeals filed under the IBC; (ii) is the annexing of a certified copy mandatory for an appeal to the NCLAT against an order passed under the IBC.On the first issue, the court observed:15. The IBC is a complete code in itself and over-rides any inconsistencies that may arise in the application of other laws. Section 61 of the IBC, begins with a non-obstante provision - "notwithstanding anything to the contrary contained under the Companies Act, 2013" when prescribing the right of an aggrieved party to file an appeal before the NCLAT along within the stipulated period of limitation. The notable difference between Section 421(3) of the Companies Act and Section 61(2) of the IBC is in the absence of the words "from the date on which a copy of the order of the Tribunal is made available to the person aggrieved" in the latter. The absence of these words cannot be construed as a mere omission which can be supplemented with a right to a free copy under Section 420(3) of the Companies Act read with Rule 50 of the NCLT Rules for the purposes of reckoning limitation. This would ignore the context of the IBC's provisions and the purpose ...

Limitation Period For Appeal Under Section 61 IBC Starts Running From Date Of Pronouncement; Delay In Uploading Won't Exclude Limitation : Supreme Court

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Limitation Period For Appeal Under Section 61 IBC Starts Running From Date Of Pronouncement; Delay In Uploading Won't Exclude Limitation : Supreme Court

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