Does Limitation Period For Filing Appeal Applies To Period For Curing Defects?: NCLAT Refers Question To Larger Bench
The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Justice N Satyanarayana Murthy (Judicial Member) and Mr. Barun Mitra (Technical Member), while adjudicating in an appeal filed in Mr. V R Ashok Rao v TDT Copper Limited, has observed that issue of delay in refilling of appeal is often coming before the NCLAT Bench...
The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Justice N Satyanarayana Murthy (Judicial Member) and Mr. Barun Mitra (Technical Member), while adjudicating in an appeal filed in Mr. V R Ashok Rao v TDT Copper Limited, has observed that issue of delay in refilling of appeal is often coming before the NCLAT Bench for consideration. Accordingly, the NCLAT Bench has referred the following question to a larger Bench: 'whether limitation for filing an Appeal before NCLAT also governs the period for curing defect in the Appeal and does NCLAT have jurisdiction to condone the delay in refilling of appeal if it is beyond the limitation prescribed in Section 61 of the IBC or Section 421 of the Companies Act, 2013?'
Background Facts
The Appellant had filed an appeal before the NCLAT under Section 61 of the Insolvency and Bankruptcy Code, 2016 ("IBC") against the Order dated 11.03.2022 passed by the NCLT New Delhi Bench. The Memo of Appeal was presented in the NCLAT office on 13.04.2022. After scrutiny of the Memo of the Appeal on 19.04.2022, defects were intimated to the Appellant. The Appellant refilled the Memo of the Appeal on 08.06.2022, there being delay of 43 days in refiling the Appeal. The Registrar of NCLAT vide its "Office Note" dated 12.07.2022 placed the matter before the NCLAT Bench under the heading 'For Admission (Fresh Cases) with defects'.
Contentions Of The Parties
The Appellant submitted that refiling delay of 43 days may be condoned and the Appeal be heard on merits. The limitation for filing an Appeal under Section 61 of the IBC is 30 days, the Appeal being filed on 13.04.2022, an Application for condonation of delay of two days in filing the Appeal was field along with the Appeal.
Respondent No. 1 submitted that refiling delay does not deserve to be condoned as the refiling of the Appeal on 08.06.2022 shall be treated as fresh filing of the Appeal and the same is beyond 45 days from date of the Impugned Order. Neither delay in filing the Appeal can be condoned nor delay in refiling need to be condoned. Under Rule 26 of the NCLAT Rules, 2016, only 7 days' time is allowed to remove the defects and the defects having communicated to the Appellant on 19.04.2022, the said defects could have been removed only till 26.04.2022. Whereas after removal of the defect Appeal was refiled on 08.06.2022, hence registration of the Appeal should be refused.
Issue
Whether the refiling delay of 43 days in refiling the Appeal can be condoned and further the Appeal is to be treated as a fresh Appeal on 08.06.2022 on the date when it was re-presented.
In event, it is accepted, the Appeal which was firstly presented on 13th April, 2022 and re-presented on 08th June, 2022 is a fresh Appeal filed on 08th June, 2022. 08th June, 2022 being beyond 45 days, whether this Tribunal shall have no jurisdiction to condone the delay in filing the Appeal.
Decision Of The NCLAT
The Bench placed reliance on the following judgments:
- Northern Railway Vs. Pioneer Publicity Corporation Pvt. Ltd., (2017) 11 SCC 234, wherein the Supreme Court held that refiling of the Application after curing the defects in Application does not amount to fresh filing of the Application for counting limitation.
- P. Ram Bhoopal & Ors. Vs. Pragnya Riverbridge Developers Limited & Ors., Civil Appeal No. 19486 of 2017, wherein the Supreme Court held that the initial date of lodgment of the appeal is the date on which the appeal should be considered as filed, even though an appeal number may be given to the appeal subsequently
- Mr. Jitendra Virmani v MRO-TEK Realty Ltd. & Ors., Company Appeal (AT) No. 138 of 2017 and Arul Muthu Kumaara Samy v Register of Companies, Company Appeal (AT) No. 122 of 2020, wherein the NCLAT held that when defect is not cured within seven days and Appeal is filed thereafter it should be treated as fresh Appeal.
The Bench opined that the view taken by NCLAT in Mr. Jitendra Virmani v MRO-TEK Realty Ltd. & Ors., and Arul Muthu Kumaara Samy v Register of Companies, does not lay down the correct law in view of the judgments of the Supreme Court in Northern Railway v Pioneer Publicity Corporation Pvt. Ltd and P Ram Bhoopal v Ors. Vs. Pragnya Riverbridge Developers Limited & Ors.
The Bench further observed that the issue of delay in refiling is often coming before NCLAT for consideration and the Judgments of NCLAT in its aforementioned two cases need to be reconsidered for an authoritative pronouncement on the issue.
The Bench held that the following questions need to be considered by a Larger Bench:
- Whether the law laid down by this Tribunal in "Mr. Jitendra Virmani Vs. MRO-TEK Realty Ltd. & Ors" and three Member Bench Judgement in "Arul Muthu Kumaara Samy Vs. Registrar of Companies" that when the defect in Appeal is cured and the Appeal is refiled before the Appellate Tribunal beyond seven days, the date of re-presentation of the Appeal shall be treated as a fresh Appeal, lays down correct law?
- Whether the limitation prescribed for filing an Appeal before this Appellate Tribunal under Section 61 of Insolvency and Bankruptcy Code, 2016 or Section 421 of the Companies Act, 2013 shall also govern the period under which a defect in the Appeal is to be cured and this Appellate Tribunal shall have no jurisdiction to condone the delay in refiling/representation if it is beyond the limitation prescribed in Section 61 of the IBC or Section 421 of the Companies Act, 2013.
Case Title: Mr. V R Ashok Rao v TDT Copper Limited
Case No.: Company Appeal (AT) (Insolvency) No. 780 of 2022
Counsel for Appellant: Dr. Farrukh Khan, Ms. Akanksha Singh, Mr. Ateendra Saumya Singh, Advocates.
Counsel for Respondent: Ms. Anshula Grover, Advocate.