Limitation period under Section 61 IBC to file appeal runs from day of pronouncement of order, not date of uploading order: Supreme Court

The thirty-day limitation period prescribed by Section 61(2) of the Insolvency and Bankruptcy Code (IBC) to file an appeal against a decision of National Company Law Tribunal begins from the date of pronouncement of the order in the open court and not the date of the order being uploaded, the Supreme Court ruled on Friday (V Nagarajan v. SKS Ispat and Power Ltd.& Ors)..Sections 61(1) and (2) of the IBC consciously omit the requirement of limitation being computed from when the ‘order is made available to the aggrieved party’, in contradistinction to Section 421(3) of the Companies Act as per which limitation period begins from the date when a copy is made available, the Court said..Owing to the special nature of the IBC, the aggrieved party is expected to exercise due diligence and apply for a certified copy upon pronouncement of the order it seeks to assail, in consonance with the requirements of Rule 22(2) of the NCLAT RulesThus, a party’s failure to file an application to obtain a certified copy of the order immediately after pronouncement denies him the right of extending limitation period on account of delay in upload.“It is not open to a person aggrieved by an order under the IBC to await the receipt of a free certified copy under Section 420(3) of the Companies Act 2013 read with Rule 50 of the NCLT and prevent limitation from running. Accepting such a construction will upset the timely framework of the IBC,” the Court said.However, the Court clarified that the time period between application for issuing of a certified copy and the date of its receipt can be condoned. But at the same time, the time period between pronouncement of judgment and filing of application remains material to calculation of limitation period..The judgment was pronounced by a bench of Justice DY Chandrachud, Vikram Nath and BV Nagarathna.The appellant had filed an appeal before the National Company Law Appellate Tribunal (NCLAT) on June 8, 2020, without attaching the certified copy of the NCLT order reasoning that they had applied for the same on March 23, 2020 but it hadn’t been issued. It was observed that by the time an application was made for the certified copy, the limitation period for filing the appeal (February 14, 2020) was already over. The NCLAT had also remarked that the appellant presented no evidence to support their claim that a certified copy hadn’t been issued. NCLAT dismissed the appeal reasoning it was barred by limitation..The appellant argued that the clock on limitation would run from the date a free copy is provided. The fact that Section 61(2) of IBC and Section 421(3) of the Companies Act are contrasting, since the former doesn’t mention the words “from the date on which copy of the order is made available to the aggrieved person,” will have no bearing since an appeal cannot be filed without copy of the order.The Court however negatived the argument underscoring that an appeal, if considered necessary and expedient by an aggrieved party, is expected to be filed immediately without awaiting a free copy which may be received at an indefinite stage“Hence, the omission of the words "from the date on which the order is made available" for the purposes of computation of limitation in Section 61(2) of the IBC, is a consistent signal of the intention of the legislature to nudge the parties to be proactive and facilitate timely resolution,” the Bench ruled.As far as the question of need of attachment of a certified copy is concerned, Rule 22(2) of the NCLAT Rules renders the same mandatory..“The litigant has to file its appeal within thirty days, which can be extended up to a period of fifteen days, and no more, upon showing sufficient cause. A sleight of interpretation of procedural rules cannot be used to defeat the substantive objective of a legislation that has an impact on the economic health of a nation,” the Court made it clear.In the instant case, the Court concluded that the appellant’s lack of diligence deprived him of his right to file an appeal since the same is barred by limitation and the NCLAT was correct in dismissing his appeal.“The discretionary waiver does not act as an automatic exception where litigants make no efforts to pursue a timely resolution of their grievance. The appellant having failed to apply for a certified copy, rendered the appeal filed before the NCLAT as clearly barred by limitation,” the Court said while dismissing the appeal..[Read Judgment]