A. Rajendra vs Gonugunta Madhusudhan Rao & Ors.

The Appellant filed two Appeals under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 challenging two separate orders of the Adjudicating Authority – However, appeals were preferred without any application for condonation of delay – Since the first appeal had been filed along with free certified copy of the order dated 20.07.2023, which, on being ready and became available on 01.08.2023 was made the basis to assert in the application that the appeal was within limitation whereas in the application in the other appeal, it was asserted that the period of limitation would begin from the date of knowledge of the contents of the order which was made available to the appellant by the ‘RP’ on 07.08.2023, therefore the appeal was within limitation – Although it was mentioned that the copies have been applied for by instructing the counsel, but no proofs thereof have been submitted rather at a subsequent stage it is admitted as a matter of fact that the appellant has not applied for the certified copy of any of the Orders – The NCLAT decided that the appeals have not been filed within limitation and therefore could not have been entertained. Held: The statutory time limit of 30 days within which an appeal can be preferred has been provided for in sub-section (2) of Section 61 of IBC – Proviso thereto allows an additional period of 15 days to file an appeal only on the satisfaction of NCLAT that there was sufficient cause for not filing the appeal earlier within the initial period of 30 days – The restrictions with regard to allowing extension in the provisions stipulated is cloaked in such a manner that the provisions have to be strictly followed – The first aspect is that the period is extendable by 15 days and not beyond that – This period cannot be claimed as a matter of right for extension of the limitation rather it is laced with the satisfaction at the end of the NCLAT upon having shown sufficient cause – The discretion, therefore, has further been circumscribed and not merely left at the whims and fancy of NCLAT – The cumulative reading of the proviso would therefore entail that the extension of period so provided for has to be strictly construed and has not to be exercised in a liberal manner which highlights the legislative intent which has to be given effect to. [Para 14] By referring to V Nagarajan v. SKS Ispat and Power Limited [2021]

14 SCR 736, it was held that the scheme of Section 61 of the IBC, 2016 does not contain the condition for commencement of period of limitation only after obtaining a certified copy of the Order, thereby refuting the justification of non-availability of certified copy of the Order offered for delay in filing the appeal – It was held that the limitation thus, starts from the date of pronouncement of the Order and not from the date the order is made available to the parties. [Paras 14, 17]

A slate of interpretation of procedural rules cannot be used to defeat the substantive objective of legislation which is prescribed in a time frame – The period of limitation for filing the appeal having been laid down and proviso thereto limiting the exercise up to a distance for condoning the delay mandatorily has to be adhered to. [Para 18]

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. [Para 24] Insolvency and Bankruptcy Act, 2016 – NCLAT Rules, 2016 – Parties cannot be automatically dispensed with the obligation to apply for and obtain a certified copy of the impugned order for filing an appeal:

Held: Referring to Rule 22 of the NCLAT Rules, the Court concluded that the parties cannot be automatically dispensed with the obligation to apply for and obtain a certified copy of the impugned order for filing an appeal – However, the time taken by the Court to prepare the decree or Order cannot be excluded under Section 12 of the Limitation Act before the application to obtain a certified copy thereof is made – The right to receive a free copy does not obviate the obligation of the appellant to seek a certified copy through an application – The frequent grant of waivers in filing the certified copy of the impugned order do not confer an automatic right on an applicant for dispensing with compliance of the requirement as laid down under Rule 22(2) of the NCLAT Rules negatory. [Para 19] Insolvency and Bankruptcy Act, 2016 – NCLAT Rules, 2016 – 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:

Held: 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. [Para 25]