Insolvency & BankruptcyNational Company Law Tribunal & NCLATLimitation Period to file an Appeal IN NCLAT during Covid -19

August 8, 20200
National Company Law Appellate Tribunal, New Delhi
Mr. V Nagarajan Resolution Professional v. SKS Ispat and Power Ltd. and Others
Company Appeal (AT) (Insolvency) No. 561 of 2020 | Date: 16.07.2020
The Appeal was filed before the Appellate Authority only on 08 June 2020 against the order dated 31 December 2019 passed by the Adjudicating Authority.
The Adjudicating Authority in its order had declined to interfere with the performance guarantee given by the bankers on behalf of the Corporate Debtor and thereby refused to grant interim relief to the Corporate Debtor.
As per Section 61 of the Insolvency and Bankruptcy Code, 2016 ( “the Code”), the Appeal can be filed before the Appellate Tribunal against order of the Adjudicating Authority within 30 days, extendable up to maximum 15 days.
The Appellant had not filed an application to condone the delay. Instead, the Appellant contended that the order was passed on 31 December 2019, but the certified copy and free copy of the said order was not issued. Further, only an unsigned copy of the order was made available on 12 March 2020.
Therefore, the Appellant averred that an appeal could be filed till 11 April 2020 but as per the Supreme Court order dated 23 March 2020, limitation periods stands extended from 15 March 2020 due to Covid-19. Therefore, the Appellant’s case is that the appeal is not barred by limitation.
Whether the Appeal is barred by limitation under Section 61 of the Code?
The Tribunal interpreted Section 61 of the Code and held that:
“The proviso to Section 61 of the Code provides that the Appellate Tribunal may allow an Appeal to be filed after the expiry of the statutory period of 30 days. Still, in no circumstances, such extended period shall exceed 15 days. The language of the proviso to Section 61(1)of the Code makes it clear that this Tribunal does not have the power to extend the time limit beyond 15 days, in addition to the statutory time limit of 30 days. It is also clear that this extension of 15 days depends upon the satisfaction of the Appellate Tribunal, on being shown the sufficient cause for not filing the Appeal within the time limit.”
In order to support such interpretation and to further hold that no extension, other than the one granted in the proviso, can be granted, the Tribunal referred to the Supreme Court judgement in the case of Mobilox Innovations (P) Ltd. v. Kirusa Software (P) Ltd., (2018) 1 SCC 353. It was held that it is important to stick with the timelines within which the insolvency resolution process is to be triggered and an appeal under section 61 of the Code can only be filed within 30 days of the order with an extension of 15 days and no more.
Further, the Supreme Court held that even under section 64 of the Code an extension can be granted for only another 10 days and the Tribunal shall record reasons for such extension. The Supreme Court categorically held in favour of the strict adherence of the timelines.
Similarly, the Tribunal referred to Pr. Director General of Income Tax v. Spartek Ceramics India Ltd., 2018 SCC OnLine NCLAT 289 wherein it was held that:
“[The Appellate Tribunal] has no power to condone the delay if appeal under Section 61 is preferred beyond fifteen days from the date of the expiry of the period of thirty days. Meaning thereby, no appeal under sub-section (1) of Section 61 can be entertained after forty-five days of knowledge of the order passed by the Adjudicating Authority.”
Further, the Tribunal held that the Appellant was unable to support his contentions with any evidence and had not submitted any application establishing enough reason for not filing the Appeal within the given time. Thus, the question of automatic extension of time limit did not arise herein. The Appellant had knowledge of the order passed by Adjudicating Authority on 31 December 2019. 
Thus, the Tribunal concluded that it had very limited jurisdiction to extend the time limit of 15 days on satisfaction and sufficient cause only.
Further, as per Rule 22 of the National Company Law Appellate Tribunal Rules, an appeal must be accompanied by a certified copy of the impugned order which the Appellant had failed to do.
Therefore, the Appeal was held to be non-maintainable and barred by limitation.
Subsequently, regardless of the fact the appeal was barred by limitation, the Tribunal even decided on the merits of the appeal. It read section 3(31), 14(1) and 14(3) of the Code from which it was clear that “the moratorium order passed under sub-section (1) to Sec 14 of the Code does not apply to the surety in a contract of guarantee to a Corporate Debtor.”
Therefore, the Tribunal concurred with the decision of the Adjudicating Authority and held that no interference was called for even on merits.
The Tribunal, in this case, adopted a very strict approach, during Covid-19 when entire world is impacted and affected in its entirety, towards the timelines provided under the Code for the triggering process and insolvency resolution process. It interpreted Section 61 of the Code rigidly to prevent liquidation proceedings from going on interminably.
It has not considered Supreme Court order dated 23 March 2020 which was very much binding upon NCLAT including all subordinate Courts of India.
Further, the Tribunal understood that an appeal before the NCLAT must be accompanied with the impugned order, however, it deplored the lax attitude of the Appellant since he/she had not filed any Application for Condonation of Delay for not getting a certified copy of the order by the Adjudicating Authority.
The judgement however leaves one question unanswered. The NCLAT Rules require a certified copy of the impugned order to be attached to the appeal. However, the Tribunal referred to Pr. Director General of Income Tax v. Spartek Ceramics India Ltd., wherein the NCLAT held that knowledge of the order being passed is sufficient for the commencement of the limited period before which an appeal can be filed.
It is, therefore, unclear as to how an appeal would be filed if a certified copy of the order is not released or made available to the Appellant and such unavailability can be supported with evidence.
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