If Tribunal Is Closed On Last Day Of Filing Appeal U/S 61 Of IBC, That Day Shall Stand Excluded As Per Rule 3 Of NCLAT Rules: NCLAT

Brief Facts:

The present appeals have been filed against an order passed by the National Company Law Tribunal (NCLT) by which it has allowed the application filed by the liquidator.

Both the appeals have been filed after a prescribed period of 30 days therefore Interlocutory Applications (IA) have also been filed along with the appeals seeking condonation of delay.

Contentions:

The appellant submitted that application for condonation of delay filed by the Appellant is within condonable period and the Appellant being an organization, which require requisite approval and deliberations, delay deserve to be condoned.

It was also argued that section 4 of the Limitation Act, 1963 (Act) was not to be applied and by virtue of Rule 3, the period of 15 days, which is a condonable period, this Tribunal can condone the delay and the delay has also to be treated to be within period covered under Rule 3.

Based on the above, it was argued that 15.09.2024 and 16.09.2024 also need to be excluded and thus, the Appeal filed on 17.09.2024 has to be treated within the condonable period.

Per contra, the respondent submitted that as far as giving the benefit of holidays falling between the period of 15 days of the condonable period, the NCLAT in State Bank of India vs. Darwin Platform Infrastructure Limited & Ors. (2024),held that the benefit of Section 4 of the Act can be extended only with regard to period prescribed, i.e. for 30 days period.

It was also argued that the period of limitation prescribed under Section 4 of the Limitation Act, cannot be excluded, even if 30 days period is expiring on holiday.

Observations:

The Tribunal observed that the time period for filing an appeal under section 61 of the code is 30 days. The additional period of 15 days that has been prescribed under proviso to section 61(1) is not a prescribed period as it is merely the period upto which the delay in filing the appeal can be condoned on the sufficient cause being shown.

It further said that the power to condone the delay of 15 days is the power vested in the Appellate Tribunal and there is no applicability of Rule 3 of the NCLAT Rules with regard to power of condonation vested in this Appellate tribunal for condonation of delay of 15 days.

The NCLAT in Darwin Platform Infrastructure Ltd. (Supra) held that “the extended period of 15 days as provided in Section 61(2) proviso of the Code is not the prescribed period for limitation and the benefit of Section 4 is attracted only when last date of the limitation falls on Holiday.”

The Tribunal further observed that Rule 3 of the NCLAT Rules states that when the Appellate Tribunal on the last day of filing the appeal is closed, that day and any succeeding day on which the Tribunal remains closed shall be excluded from the computation of limitation period.

Therefore, the submission of the respondent that the last day on which the Appellate Tribunal is closed cannot be excluded is contrary to express language of Rule 3 and deserves to be rejected.

The Tribunal after referring to the facts of its judgment in Raj Kumar Banerjee vs. Supriyo Kumar Chaudhuri (2022) observed that when 30 days period was expiring on 7th May and 8th May being holiday, the last date for filing the Appeal would be 9th May, 2022.

Based on the above, it added that applying the said analogy in the facts of the present case, 01.09.2024 being the last day and 31st August, 2024 and 1st September, 2024 being Saturday and Sunday, the Appeal could have been filed by 02.09.2024. The aforesaid two days, i.e. 31st August, 2024 and 1st September, 2024 has to be excluded by virtue of Rule 3.

The Tribunal concluded that for computing 30 days period for filing the Appeal under Section 61, if the office of the Tribunal is closed on the 30th day, the period shall extend upto the date on which the Tribunal re-opens.

Accordingly, the application seeking condonation of delay in appeal number Company Appeal (AT) (Ins.) No.1862 of 2024 was allowed whereas the application in Company Appeal (AT) (Ins.) No.1883 of 2024 was rejected.

Case Title: 'BSE Ltd. Versus Mrudula Brodie & Ors.'

Case Number: Company Appeal (AT) (Insolvency) No. 1862 of 2024 & Interlocutory Application No.6846 of 2024 and Company Appeal (AT) (Insolvency) No. 1883 of 2024 & Interlocutory Application No.6950 of 2024

Judgment Date:21/02/2025

For Appellant : Mr. Abhishek Puri, Ms. Surbhi Gupta, Mr. Sahil Grewal, Mr. Manish Chhangani, Advocates.

For Respondent : Mr. Naveen Hegde, Mr. Akshay Puri, Mr. Mayank Samuel, Advocates for R-1. Mr. Sidharth Sehti, Mr. Kunal Saini, Advocates for R-3 (NSDL).

Mr. Neeraj Malhotra, Sr. Advocate with Mr. Mohit Kumar, Bafna, Mr. Abhishek Baid, Mr. Praneet Das, Mr. Nimish Kumar, Advocates for R-5 (SEBI).

For Appellant: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Aditya Shukla, Ms. Heena Kochar, Ms. Krushi Barfiwala, Ms. Rima Desai, Mr. Rudra Desosthali, Mr. Pranav Sarthi, Ms. Prachi Dhingra, Advocates.