Supreme Court Wonders Why NCLAT Wrote Long Order On Delay Condonation Application Despite High Pendency

The Supreme Court recently expressed surprise that the National Company Law Appellate Tribunal (NCLAT), despite having a high pendency of cases, devoted extensive time and effort to writing a 17-page order on a delay condonation application.

A bench of Justice Abhay Oka and Justice Ujjal Bhuyan remarked that lengthy submissions and pleadings by members of the Bar often contribute to unnecessarily verbose orders.

“We wonder why the NCLAT which has a high pendency should devote so much of time and energy in writing an order running into 17 pages for considering the application for condonation of delay. While we say this, we cannot ignore that some times, such long orders are required to be written due to verbose and unnecessary long submissions of the members of the Bar. We find from the decisions after decisions which come before us that in many cases, the members of the Bar make very lengthy submissions before the NCLAT and file lengthy pleadings and affidavits in an application for the condonation of delay”, the Court observed.

The Court made this observation while setting aside the NCLAT order that rejected an application for condonation of delay in filing an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016.

Under Section 61(2) of the IBC, an appeal must be filed within 30 days. The proviso to this section allows for a maximum extension of 15 days if sufficient cause is shown. In this case, the 15-day extended period expired on November 11, 2022. The appeal was e-filed on the same day, but since the next two days were holidays for the NCLAT, the hard copy was submitted on November 14, 2022.

The NCLAT passed a 17-page judgment on November 7, 2023, rejecting the condonation of delay application. The appellant then approached the Supreme Court on December 15, 2023. The Court noted that the appeal had remained pending before it for over 13 months.

The respondents argued that strict adherence to the timelines under the IBC was crucial to maintaining its objective. They contended that a liberal approach in condoning delays would undermine the IBC's purpose.

While acknowledging the significance of timelines under the IBC, the Court found that the NCLAT adopted a hyper-technical approach in this case. Given that the appellant was a foreign company and had filed within the 15-day extension period, the Court held that the delay was adequately explained.

The Supreme Court, therefore, set aside the NCLAT's order dated November 7, 2023, allowed the condonation of delay application, and directed the NCLAT to proceed with the hearing of the appeal in accordance with law.

Case no. – Civil Appeal Nos. 8240-8241/2023

Case Title – Power Infrastructure India v. Power Finance Corporation Ltd. & Anr.

Citation : 2025 LiveLaw (SC) 285