Litigant Who Does Not Apply For Certified Copy Cannot Claim Benefit Of Limitation Period If Delay Is Caused Due To Receipt Of Free Copy Of NCLT Order : NCLAT New Delhi

Brief facts

An appeal was filed against the decision of the NCLT wherein the NCLT ordered initiation of CIRP against the corporate debtor on July 16, 2024. This appeal was preferred after 18 days from the limitation period. The appellant requested to condone this delay and admit the appeal.

Contentions

The appellant submitted that the time period from the pronouncement of judgment on July 16, 2024 to receiving a free copy of the order of the NCLT on July 23, 2024 should be condoned. It was argued that the free copy was received only on July 23, 2024.

The appellant relied on the Supreme Court judgment in State Bank of India vs. India Power Corporation Ltd wherein the court elaborated the distinction between a certified copy obtained upon payment of fee and free certified copy. It was contended that the free copies should be considered certified copies for the purpose of calculating the limitation period. It was further submitted that since a sufficient cause had been shown, a delay of 18 days should be condoned. It was further contended that the delay if any was caused due to receipt of free copy.

NCLAT's Analysis

The NCLAT first analysed the provisions related to filing of an appeal and the limitation period. Section 61 of the IBC provides that an appeal has to be filed within 30 days from the date of order which may further be extended for 15 days. Rule 22 of the NCLAT Rules, 2016 provides that a certified copy of the impugned order must be filed along with the appeal. Rule 50 further provides that copy of an order can be obtained upon payment of fee or free of cost.

The Tribunal further referred to the Supreme Court judgment in V Nagarajan vs. SKS Ispat and Power Ltd. (2022) wherein it was held that the limitation period for the purpose of filing an appeal under the IBC begins from the date of pronouncement of an order and not from the receipt of a free copy. It was further observed that the IBC prefers expeditious disposal of the cases therefore appeal must be preferred within the limitation period. It was held that 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 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 tribunal further observed that the appellant reliance on the Supreme Court judgment in State Bank of India vs. India Power Corporation Ltd (2024) is misplaced. This judgment recognised that free of cost copy as well as copy obtained upon payment of fee are certified copy for the purpose of Rule 50. Therefore, the appellant did not require to wait for free cost of copy when it was killing limitation period, it could have applied for receiving a certified copy of the order upon payment of fee. It was held that a litigant who does not apply for a certified copy cannot then fall back and claim that he was awaiting the grant of a free copy to obviate the bar of limitation.

The tribunal further noted that in the present case, the appeal was filed after 18 days even from the condonable period 15 days as provided under section 61 of the IBC therefore the delay could not be condoned. The tribunal further observed that the contentions of the appellant cannot be accepted as it would defeat the objective of the IBC to resolve the disputes in a timely manner. It was held that the mere fact that the appellant received free of cost copy on 23.07.2024 cannot arrest the running of the limitation which began on the date when the Judgment was pronounced.

Conclusion

The NCLAT refused to condone delay of 18 days in filing the appeal on the ground that it would defeat the objective of the IBC. Accordingly, the delay condonation petition along with Memo of appeal was dismissed.

Case Title: Shakir v. Fruitful Buildcon Pvt. Ltd

Court: NCLAT, New Delhi

Case Reference: Comp. App. (AT) (Ins) No. 1893 of 2024 & I.A. No. 6999 of 2024

Judgment Date: 17/10/2024

Click Here To Read/Download The Order