S.61 IBC | When Judgment Is Pronounced In Open Court, Limitation Period Runs From That Day : Supreme Court

The Supreme Court held that the incident which triggers the running of the limitation period under the Insolvency and Bankruptcy Code (IBC) 2016 is the the date of pronouncement of the Order and in case of non-pronouncement of the Order when the hearing concludes, the date on which the Order is pronounced or uploaded on the website.

The Court also clarified that where the judgment was pronounced in open Court, the period of limitation starts running from that very day. However, the party is entitled to exclude the period, as per Section 12(1) of the Limitation Act 1963,  during which the certified copy of the order was under preparation on an application filed by that party

A bench comprising Justice AS Oka, Justice Ahsanuddin Amanullah and Justice AG Masih made these observations while rejecting appeals against the orders of the National Company Law Appellate Tribunal dismissing two appeals filed against the orders of the National Company Law Tribunal as time-barred.

Referring to Section 61 of the IBC, NCLAT Rules and various precedents, the judgment authored by Justice Masih stated :

"Therefore, the incident which triggers limitation to commence is the date of pronouncement of the Order and in case of non-pronouncement of the Order when the hearing concludes, the date on which the Order is pronounced or uploaded on the website."

However, where the judgment was pronounced in open Court, the period of limitation starts running from that very day. The appellant is however entitled to seek relief under Section 12(2) of the Limitation Act for excluding the period during which the certified copy was under preparation on an application preferred by that party.

The Court held that when a party does not apply for certified copy, the period of limitation would start from the very next day of pronouncement of the order as the date of the pronouncement of order is excluded as per Section 61.

Reference was made to the judgment in V Nagarajan vs SKS Ispat and Power which held that the limitation starts from the date of pronouncement of the Order and not from the date the Order is made available to the parties. Reliance was also placed on Sanjay Pandurang Kalate v Vistra ITCL (India) Limited and Others, National Spot Exchange Limited vs. Anil Kohli, Resolution Professional for Dunar Foods Limited

Exemption from filing certified copy not a right; No benefit of S.12 Limitation Act when party didn't apply for certified copy

The Court noted that Rule 22 of the NCLAT Rules mandate the filing of certified copy of the order along with the appeal.  "Exemption from filing of certified copy, as has been referred to above, cannot be claimed as a matter of right in terms of the statutory requirements of the Rules," the Court said.

The Court also held that the provisions regarding limitation have to be construed strictly. The provision regarding extension of 15 days time has to be strictly construed and has not to be exercised in a liberal manner

The Court also held that when no certified copy was applied, benefit of Section 12(1) of the Limitation Act cannot be claimed.

"the benefit of Section 12(2) of the Limitation Act is available only on an application for grant of certified copy of the Order having been filed till the date of preparation of the said certified copy. Since no such steps have been taken by the appellant for applying the certified copy, the appeal was beyond limitation."

In this case, the order of the NCLT was passed on 20.07.2023. One appeal was filed on 28.08.2023, without any application for condonation of delay. The appellant claimed that the limitation ought to be reckoned from 01.08.2023, when the certified copy was made available. However, the NCLAT held that the limitation has to be reckoned from the date of pronouncement, which meant that the appeal was filed with a delay of ten days. The NCLAT dismissed the appeal on the ground of mis-statement that it was filed within the limitation period.The second appeal was filed without certified copy. An application was filed seeking exemption saying that copy was lost in transit.

The Supreme Court affirmed the findings of the NCLAT and dismissed the appeals. 

Case : A Rajendra v Gonuganta Madhusudhan Rao and others

Citation : 2025 LiveLaw (SC) 392

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