Limitation U/S 61 Of IBC Is To Be Calculated From Date Of E-Filing, Rules Prevalent When Application Is Considered To Be Applied: NCLAT New Delhi

Brief Facts

Shree Ganapati Power and Transformers (operational creditor/appellant) challenged an order passed by the NCLT, Kolkata on April 27, 2022 in which a petition under section 9 of the IBC was dismissed against Vijeta Projects and Infrastructure Ltd (corporate debtor/respondent). The appellant received a certified copy of order of the NCLT on May 5, 2022. Thereafter, an appeal was e-filed on May 30, 2022 which was within limitation period but physical copy was presented on June 20, 2022 which was beyond the period of limitation.

Contentions

It was argued by the appellant that SOP dated October 21, 2022 which permitted computation of period of limitation from the presentation of the appeal, came into force on November 11, 2022 and appeal was e-flied on May 30, 2022. It was further contended that when e-appeal was filed, the SOP dated January 3, 2021 that was in effect at that time permitted the computation of period of limitation from the date of e-filing. Additionally, the SOP dated October 21, 2022 was withdrawn and they were replaced by new SOPs which became effective from December 24, 2022. The new SOP again allowed to compute the period of limitation from the date of e-filing. It was submitted that since the appeal has been taken up after the new SOP, it should govern the appeal. The appellant relied on the Supreme Court Judgment in Sanket Case Kumar Agarwal & Anr. Vs. APG Logistics Pvt. Ltd., 2023 LiveLaw (SC) 406.

Per contra, it was argued by the respondent that the period of limitation should be counted from the date presentation of appeal as per Rule 22 of the NCLAT Rules, 2016 and the SOP dated October 21, 2022. Based on this, it was further contended that the appeal was filed after lapse of 54 days from the date of impugned order passed. Section 61 of the IBC only permits 30 days time period to file the appeal which can be extended by 15 days therefore the appeal was time barred.

Issue Before NCLAT

The issue is thus as to whether the date of limitation is to be counted from the date of e-filing or the date of presentation of appeal?

NCLAT's Analysis

The NCLAT analysed section 61 of the IBC which provides 30 days time period to file an appeal which may be extended by 15 days on the sufficient cause being shown. The Tribunal also referred to Rule 22 of the NCLAT Rules, 2016 which states that the appeal can be filed physically at the filing counter. However, Rule 103 of the NCLAT Rules prescribes that e-appeal can also be filed and this provision was extensively used during pandemic.

The Tribunal further noted various SOPs which were issued during pandemic. It relied on the NCLAT judgment in Sanket Kumar Agrawal & Anr. V. APG Logistics Pvt. Ltd in which it was established that if an e-appeal is filed, it would be within the period of limitation. The Tribunal further referred to the Supreme Court judgment in Somdev Kapoor v. State of West Bengal in which it was held that procedural rules prevalent at the time of considering the appeal should govern it. It was further noted that since the appeal was considered when the SOP that was prevalent allowed the e-filing of appeal and also permitted the computation of period of limitation from that date itself, the appeal was within the period of limitation. It was observed as under:

“Since, the appeal has been filed by the Appellant on 30.05.2022 through e-filing and the hard copy was filed on 20.06.2022 though before coming into force the SOP dated 21.10.2022 which has been made effective from 01.11.2022, the SOP dated 21.10.2022 has been withdrawn by SOP dated 24.12.2022 and it has been ordered that limitation is to be counted from the date of e-filing, therefore, in view of the decision of the Hon'ble Supreme Court in the case of Somdev Kappor (Supra) where it has been held that the rules which are prevalent on the date when the application is considered are to be applied and not the date when the application is made, the application having been filed by the Appellant has to be considered in terms of SOP dated 24.12.2022 which is in operation at the time when the application for condonation of delay is being considered”.

The NCLAT further observed that:

“Thus, in view of the aforesaid discussion, the Hon'ble Appellate Tribunal does not agree with the argument raised by Respondent No. 1 that limitation is to be counted from the date of presentation of appeal at the counter because the issue of computation of limitation was first determined by way of SOP dated 21.10.2022 whereas the appeal was filed much earlier in both ways i.e. e-filing as well as by way of hard copy and the SOP dated 21.10.2022 was superseded/withdrawn by SOP dated 24.12.2022 as per which the limitation is to be counted from the date of e-filing”

The NCLAT further observed that the appeal was filed within statutory period allowed under section 61 of the IBC and it was delayed only by 3 days which was sufficiently explained by the appellant therefore the contention of the respondent is rejected. It was held as under:

“In view of the aforesaid facts and circumstances, the objection raised by the Respondent is hereby overruled and since there is a delay of only three days in filing the appeal which has also been duly explained in detail in the application which is supported by an affidavit and the power to condone the said delay in terms of Section 61(2) proviso is with this Tribunal, therefore, the same is hereby condoned on being satisfied that sufficient reason has been assigned by the Appellant”.

Conclusion

The NCLAT concluded that the appeal was within period of limitation and the delay of 3 days was properly explained by the operational creditor. Accordingly, the plea of the corporate debtor was rejected and the next hearing was scheduled.

Case Title: Shree Ganapati Power and Transformers. v. Vijeta Projects and Infrastructure Ltd. and Ors

Court: National Company Law Appellate Tribunal, New Delhi

Case Reference: Company Appeal (AT) (Ins.) No. 811 of 2022 & I.A. No. 5695 of 2023

Judgment Date: 04/10/2024

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