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

Key Takeaways

• While hearing the case of V Nagarajan V. SKS Ispat and Power Ltd. & Ors, the Supreme Court held that if a party fails to apply to secure a certified copy of the order after pronouncement immediately, then the party is denied the right to extend the limitation period because of their delay.
• According to Section 61(2) of the Insolvency and Bankruptcy Code (IBC), a thirty-day limitation period is prescribed to obtain the certified order. Hence, the Court stated that the order against the decision of the National Company Law Tribunal starts from the day of such pronouncement and not from the date of the order being uploaded.
• The party must apply to obtain the certified order from the date such order was pronounced and not from the date when such order is uploaded. The period of thirty days cannot be extended if the party fails to file the application.
• The Bench consisting of Justices DY Chandrachud, Vikram Nath, and BV Nagarathna observed that the act of filling the application is not just a technical requirement but also the diligence of the aggrieved party on time.

Background

• In this case, the appellant had applied for a free copy of the order on March 23, 200 which the NCLAT passed on December 31, 2019 and the order was uploaded on March 20, 2020. However, the appellant claimed that he has not received a copy of the order.
• The time of limitation for applying was over on February 14, 2020. An appeal was filed before the NCLAT on June 8, 2020 to exempt the applicant from filing a certified copy of the order as it had not been issued yet.
• The NCLAT relied upon Section 61(2) of IBC which states that the limitation period for filing such an application is thirty days and can be extended by fifteen more days, to hold that the application filed under Section 61(1) was barred by limitation. The appellant had also failed to show that the order had not been issued yet.
• Challenging this order of the NCLAT the appellant moved to the Supreme Court. The main issue was the time when the limitation period would start. Whether it would start immediately after the pronouncement or after the order was uploaded was the main contention.

Courts Observation

• The Court observed that the appellant was present before the NCLAT on December 31, 2019 when interim bail was denied to him. The appellant failed to secure the certified copy of the order and did not attempt to acquire the same.
• The Court stated that the NCLAT had given the order on December 31, 2019 and according to Section 61(2) of IBC against the order of NCLAT, the limitation period is thirty days. The thirty-day period had got over on January 30, 2020.
• After extending the fifteen days also the limitation period to apply for a certified copy of the order under Section 61(1) of the IBC, the date for filing expired on February 14, 2020.
• The Court observed that the lockdown caused due to Covid-19 started on March 23, 2020 and the Suo moto of the Court had not made any impact on the rights of the appellants to obtain the copy of the certified order.

Courts Order

• The Court ordered that the NCLAT had rightly dismissed the appeal as the period had expired, and accordingly the appeal filed by the appellant under Section 62 of IBC was dismissed

Questions
What is the importance of Section 61(1) (2) of the IBC Act?
Do you think the judgements of both the NCLAT and Supreme Court were fair?
Let us know your views on the issue in the comment section below!