The Supreme Court on May 7 ruled that the National Company Law Appellate Tribunal (NCLAT) lacks the authority to extend the filing deadline beyond the 45-day limit set by Section 61(2) of the Insolvency and Bankruptcy Code, 2016 (IBC) for appeals.
The Appellant, a successful Resolution Applicant for Rohit Ferro-Tech Limited, had its Resolution Plan approved by the Committee of Creditors and the NCLT, Kolkata. The Respondent, a former minority shareholder, appealed under Section 61 of the IBC, seeking to set aside the NCLT’s order and request that the Resolution Professional re-examine the Resolution Plan. The Respondent also filed an Interlocutory Application for a 15-day delay condonation, which the NCLAT granted. The Appellant challenged the decision before the Supreme Court.
The Bench of Justice JB Pardiwala and Justice R Mahadevan observed, “The proviso to Section 61(2) clearly limits the NCLAT’s jurisdiction to condone delay only up to 15 days beyond the initial 30-day period. Where a statute expressly limits the period within which delay may be condoned, an Appellate Tribunal cannot exceed that limit. In other words, the NCLAT being a creature of statute, operates strictly within the powers conferred upon it. Unlike a civil suit, it lacks inherent jurisdiction to extend time on equitable grounds.
The Supreme Court emphasized that once the prescribed periods (30 + 15 days) for filing appeals under the IBC expire, the NCLAT has no authority to entertain them, regardless of the reason for delay. Citing Mobilox Innovations Pvt Ltd v. Kirusa Software Pvt Ltd, the Court reinforced the IBC’s strict procedural discipline, which limits tribunals to statutory powers. In Kalpraj Dharamshi v. Kotak Investment Advisors Ltd., the Court ruled that the NCLAT cannot condone delays beyond 15 days, even on equitable grounds, affirming that the IBC's appellate process is strictly time-bound to ensure the speed and certainty of insolvency resolution.
“It is evident that the Company Secretary of the Corporate Debtor duly informed the listing departments of both NSE and BSE about the NCLT order dated 07.04.2022 within 30 minutes of its pronouncement. Hence, the limitation period for filing the appeal commenced on 07.04.2022 and expired on 07.05.2022.” the Supreme Court stated.
The Supreme Court emphasized that strict adherence to the statutory limitation period is crucial in appeals, and even a single-day delay is fatal if not condoned by the statute. It ruled that the NCLAT has no authority to extend the delay beyond the prescribed period, as allowing such condonation would undermine the legislative intent and the efficacy of the appellate process. The Court, therefore, allowed the Appeal and set aside the NCLAT’s Order.
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