SANKET KUMAR AGARWAL & ANR versus APG LOGISTICS PRIVATE LIMITED on 1 May 2023

SUPREME COURT REPORTS

[2023] 5 S.C.R.

ASANKET KUMAR AGARWAL & ANR

v.

APG LOGISTICS PRIVATE LIMITED

(Civil Appeal No. 748 of 2023)

BMAY 01, 2023

[DR. DHANANJAYA Y CHANDRACHUD, CJIAND J B PARDIWALA, J.]

Insolvency and Bankruptcy Code 2016 : ss. 61, 62 , 238A –National Company Law Appellate Tribunal Rules 2016 – rr. 3, 22C,103 , 104 – Limitation Act, 1963 – s. 12(1) – Limitation period forfiling appeal u/s. 61(2) against an order of the NCLT – On facts,dismissal of application u/s. 7 by NCLT on 26.08.2022 – Appellantthen filed application for obtaining certified copy of the order ofNCLT which was uploaded on website and provided to the appellantDon 15.09.2022 – e-filing of appeal before NCLAT on 10.10.2022along with the application for condonation of delay of five days –Physical copy of appeal filed on 31.10.2022 – NCLAT dismissedthe appeal on the ground of limitation holding that the appeal waslodged through the e-portal on 10.10.2022, which was the 46thday after the order of the NCLT – On appeal, held: Date of order ofEpronouncement and the time taken to provide certified copy to beexcluded for computing limiation for filing of appeal u/s. 61(2) –Thus, the date on which the order was pronounced by the NCLT,26.08.2022 would have to be excluded from the computation oflimitation – Between 26.08.2022, when the order was pronouncedFby the NCLT, and 10.10.2022, when the appeal was e-filed, a periodof 45 days elapsed after excluding the date on which the order waspronounced – NCLAT erroneously held that the appeal was lodgedon the 46th day whereas correctly computed, the appeal was lodgedon the 45th day – Appellant exercised due diligence and appliedfor a certified copy upon pronouncement of the order which wasGprovided on 15.09.2022 – Hence, the period of 10 days between5.09.2022 and 15.09.2022 taken by the court to provide a certifiedcopy of the order ought to be excluded when determining the periodof limitation u/s. 61(2) – Thus, the NCLAT erred in dismissing theappeal on the ground of limitation.H

Information Technology: e-filing across tribunals – NCLATmaking physical filing of appeals mandatory – Held: It is utterlyincomprehensible why NCLAT should insist on physical filing inaddition to e-filing – This unnecessarily burdens litigants and theBar and is a disincentive for e-filing – This is duplication of effort,its time consuming and adding to expense – Judiciary has tomodernize and adapt to technology – Judges uncomfortable withe-files, need to be trained – Union government to ensure a seamlesstransition to working in the electronic mode.

Allowing the appeal, the Court

HELD: 1.1 In the instant case, admittedly, the appeal wase-filed on 10 October 2022 and even a physical copy was lodgedon 31 October 2022 prior to the date on which the order of theRegistrar dated 21 October 2022 was to come into effect. Theorder dated 21 October 2022 was subsequently withdrawn on 24December 2022. The order dated 24 December 2022 now clarifiesthat limitation would be computed with effect from the date of e-filing but a physical copy would have to be filed within seven daysof e-filing. [Para 22][1172-C-D]

1.2 In the instant case, the order was pronounced by theNCLT on 26 August 2022. Rule 3 of the NCLAT Rules 2016stipulates that the date from which the period of limitation has tobe reckoned (i.e., the date of the pronouncement of the order)would have to be excluded. Hence, the date on which the orderwas pronounced by the NCLT, namely 26 August 2022 would haveto be excluded from the computation of limitation. This is in linewith Section 12(1) of the Limitation Act 1963. The provisions ofthe Limitation Act 1963 are made applicable, inter alia, to appealsbefore the NCLAT by virtue of Section 238A of the IBC. [Para23][1172-E-F]

1.3 Between 26 August 2022, when the order waspronounced by the NCLT, and 10 October 2022, when the appealwas e-filed, a period of 45 days elapsed after excluding the dateon which the order was pronounced. The NCLAT erroneouslyproceeded on the basis that the appeal was lodged on the 46thday whereas correctly computed, the appeal was lodged on the45th day. The power of condoning a delay of up to 15 days beyondthe original period of 30 days lies within the discretionary power AB

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Aof the NCLAT. The appeal was instituted within the outer limit of45 days. [Paras 24, 25][1172-H; 1173-A, C-D]

1.4 In the instant case, the application for a certified copywas sent from Delhi to Chennai on 2.09.2022, which was receivedon 5.09.2022, within the period of limitation of 30 days specifiedBin Section 61(2). This aspect lies in contrast to the facts as theyobtained before this Court in the judgment in V Nagarajan’s casewhere even the application for obtaining the certified copy wasnot filed. In the instant case, the appellant exercised due diligenceand applied for a certified copy upon pronouncement of the orderin terms of Rule 22(2) of the NLCAT Rules 2016. The certifiedCcopy was provided to the appellant on 15.09.2022. Hence, theperiod of 10 days between 5.09.2022 and 15.09.2022 taken bythe court to provide a certified copy of the order ought to beexcluded when determining the period of limitation under Section61(2) of the IBC. Thus, the NCLAT was in error in dismissingDthe appeal on the ground of limitation. The explanation whichwas advanced by the appellant for condoning the period of 5 days(beyond the period of 30 days stipulated for the filing of an appeal)was, sufficient and the delay should have been condoned withinthe four corners of the statute. The order of the NCLAT is setaside. [Paras 28, 29, 32][1175-C-G; 1176-F]E

2. The Court cannot but fail to notice the flip-flops on thepart of the NCLAT in providing administrative guidance onwhether limitation would commence from the date of e-filing orfrom the presentation of the appeal at the filing counter. Withtechnological advances, the country’s judiciary and tribunals mustFmove towards e-filing. This process has already commenced andis irreversible. The Union Government must have a fresh lookat the rules to encourage e-filing across tribunals. Perhaps oneway forward would be to constitute a Working Group to make acomprehensive assessment of the position across tribunals andGsuggest regulatory changes. Moreover, it is utterlyincomprehensible why NCLAT should insist on physical filing inaddition to e-filing. This unnecessarily burdens litigants and theBar and is a disincentive for e-filing. A lawyer or litigant who iscompelled to file physical copies in addition to e-filed documentswill have no cogent reason to resort to e-filing. This duplicationHof effort is time consuming. It adds to expense. It leaves behind SANKET KUMAR AGARWAL & ANR v. APG LOGISTICS PVT.LTD.

a carbon footprint which is difficult to efface. The judicial processhas traditionally been guzzling paper. This model is notenvironmentally sustainable. If some judges are uncomfortablewith e-files, the answer is to provide training to them and not tocontinue with old and outmoded ways of working. The judiciaryhas to modernize and adapt to technology. The tribunals can beno exception. This can no longer be a matter of choice. The IBCis a significant prong in economic reforms. It has radicallyreshaped the law relating to insolvency and bankruptcy. Themanner in which the law is administered will have to keep pacewith technology. Both the Union government in its rule makingcapacity and the administrative heads of tribunals must ensure aseamless transition to working in the electronic mode. [Para30][1175-G-H; 1176-A-D]

V Nagarajan v. SKS Ispat and Power Limited & Ors(2022) 2 SCC 244 – distinguished.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 748 of2023.

From the Judgment and Order dated 09.01.2023 of the NationalCompany Law Appellate Tribunal at Chennai in IA No.1025 of 2022 inCompany Appeal (AT) (CH) (Ins.) No. 418 of 2022.

Ms. Mayuri Raghuvanshi, VP Singh, Akshat Singh, Ms. DacchitaShahi, Vyom Raghuvanshi, Bhanu Gupta, Advs. for the Appellants.

Ms. Rashi Bansal, Adv. for the Respondent.

The Judgment of the Court was delivered by DR. DHANANJAYA Y CHANDRACHUD, CJI

1. Admit.

2. This appeal arises under Section 62 of the Insolvency andBankruptcy Code 2016[1] from a judgment dated 9 January 2023 of theNational Company Law Appellate Tribunal.[2] The NCLAT dismissed theappeal against the order of the National Company Law Tribunal[3] on theground of limitation.

1 “IBC”2 “NCLAT”3 “NCLT”

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A3. The appellant instituted an application under Section 7 of theIBC in June 2021 seeking the initiation of the Corporate InsolvencyResolution Process against the respondent. The application was dismissedby the NCLT by an order dated 26 August 2022. On 2 September 2022,the appellant filed an application for obtaining a certified copy of theorder which was pronounced by the NCLT. The application was receivedBby the Registry of NCLT on 5 September 2022. On 15 September 2022,the order was uploaded on the website of the NCLT and a certifiedcopy was provided to the appellant on the same day. The appellant lodgedan appeal before the NCLAT on 10 October 2022 in the e-filing modealong with an Interlocutory Application[4] seeking condonation of delay ofCfive days. A physical copy of the appeal was filed on 31 October 2022.

4. The appellant submitted that the appeal had been filed withinthe period of limitation from the date the order was made available in thepublic domain i.e., 15 September 2022. However, as a matter of abundantprecaution, the appellant had considered 26 August 2022 to be the dateDfrom which limitation would commence. The appellant stated that theprescribed time period of 30 days for filing the appeal ended on 5 October2022, after accounting for the exclusion of 10 days (from 5 September2022 to 15 September 2022 on account of the time taken to provide acertified copy). The appellant submitted that the inadvertent delay of 5days in filing the appeal had been caused due to the additional timeEneeded to obtain legal advice, collate documents and connect with counselduring the festive season.

5. In the background of the above sequence of events, the issuebefore NCLAT was whether the appeal was instituted within limitation.In its impugned order, NCLAT observed that the appeal was lodgedFthrough the e-portal on 10 October 2022, which was the 46[th] day afterthe order of the NCLT. It observed that while Section 61(2) of the IBCprescribes a 30-day deadline for preferring an appeal against an orderof the adjudicating authority, the appellate tribunal can condone a delayof upto 15 days, if sufficient cause is shown. Furthermore, it held thatGthe ingredients of Section 61 of the IBC do not visualize that an aggrievedperson has to wait till he is in receipt of a certified copy of the impugnedorder before preferring an appeal. The tribunal held:

“31.It cannot be gainsaid, that the `Expiry of 30 days’, afterthe `Pronouncement of the impugned order’, datedH4 “IA”

26.08.2022, was on 24.09.2022. The 30 days period inpreferring the `Appeal’, by any `Person Aggrieved’, in respect ofan `Order’, passed by the `Adjudicating Authority’, is the `deadline’prescribed as per Section 61 (2) of the Insolvency and BankruptcyCode, 2016. If an `Appellate Tribunal’ (`NCLA T’), is satisfied on`sufficient cause’, being shown to its `subjective satisfaction’, inregard to the preferring of an `Appeal’ (after the `Expiry of 30days period’), then, `such period, shall not exceed 15 days’, as perSection 61 (2) of the Code. Admittedly, the `completion of 45days’ (30 + 15 days), was on 09.10.2022. In effect, themaximum 45 days being the outer limit (30 + 15 = 45 days),beyond which, the `Appellate Tribunal’ (`NCLAT), is `bereft’of any power, to `condone the delay’, in the teeth of themandate, prescribed under the I & B Code, 2016, as opined bythis `Tribunal’.”

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6. The NCLAT held that even according to the version of theappellants, the period of 30 days would end on 4 October 2022 while theappeal was filed on 10 October 2022. It noted that 10 days (from 26August 2022 to 4 September 2022) were spent prior to the applicationfor a certified copy and between 15 September 2022 and 4 October2022 another period of 20 days elapsed.

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7. The NCLAT concluded that the appeal was barred by limitationon the ground that it was instituted on the 46[th] day following the order ofthe NCLT, exceeding the outer limit of 45 days that was permissibleunder Section 61 of the IBC.

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8. The appellant questions the order of the NCLAT on limitation.

9. The following submissions have been urged by Mr Bhanu Gupta,counsel appearing on behalf of the appellant:

i.The NCLAT ought to have excluded the period from 5September 2022, when an application for obtaining a certifiedGcopy was filed till 15 September 2022, when the certifiedcopy was received, while computing the period of limitation;

ii.The NCLAT has erroneously taken the entire periodbetween 26 August 2022 and 10 October 2022 by failing toexclude the date on which the order was pronounced, H

1166SUPREME COURT REPORTS

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namely, 26 August 2022 in terms of Section 12(2) of theLimitation Act 1963 and Rule 3 of the National CompanyLaw Appellate Tribunal Rules 2016[5];

iii.The NCLAT has disregarded judicial precedents includingthe judgment of this Court in V Nagarajan v. SKS IspatBand Power Limited & Ors[6]; and

iv.Since the order of the NCLT was uploaded on the websiteon 15 September 2022 on which day the certified copy wasalso made available, it was impossible for the appellant todraft an appeal prior to 15 September 2022 based merelyCon the pronouncement of the order without knowledge ofthe grounds for dismissal.

10. On the other hand, Ms Rashi Bansal, counsel appearing onbehalf of the respondent urged that:

i.The appeal was filed on 10 October 2022 in the electronicDmode;

ii.On 3 January 2021, a circular was issued by the NCLATnotifying a Standard Operating Procedure[7] for e-filing interms of which physical copies were required to be filed asper the procedure prescribed under the NCLAT Rules 2016Ealong with the e-filing receipt;

iii.On 21 October 2022, a further order was issued by theRegistrar of NCLAT clarifying that the period of limitationshall be computed from the date of the presentation of theappeal as per Rule 22 of the NCLAT Rules 2016, the effectFof which was that the period of limitation would cease torun only after a physical copy was presented;

iv.By an order of 24 December 2022, notified by the Registrarof the NCLAT, the earlier order dated 21 October 2022was withdrawn and it was notified for the first time thatGlimitation shall be computed with reference to the date ofe-filing; and

v.Even the e-filing of the appeal on 10 October 2022 wouldnot result in limitation ceasing to operate and it was only 5 “NCLAT Rules 2016”

6 (2022) 2 SCC 244 (“V Nagarajan”)H7 “SOP”

when a hard copy was filed that limitation would stoprunning.

11. The dispute in the appeal arises over the period of limitationapplicable for filing an appeal against an order of the NCLT under theIBC. The IBC is a complete code. Section 238 of the IBC provides thatthe Code shall have effect notwithstanding anything inconsistent therewithcontained in any other law for the time being in force or any instrumenthaving effect by virtue of any such law. Relevant provisions of the IBC,Limitation Act 1963, NCLAT Rules 2016 and administrative orders areextracted below and are referred to, in turn.

12. Section 61(1) of the IBC stipulates that notwithstandinganything to the contrary contained in the Companies Act 2013, any personaggrieved by the order of the adjudicating authority “under this Part”may prefer an appeal to NCLAT. Sub-Section (2) of Section 61 providesfor a period of limitation in the following terms:

“61.Appeals and Appellate Authority—

(1) Notwithstanding anything to the contrary contained under theCompanies Act, 2013, any person aggrieved by the order of theAdjudicating Authority under this part may prefer an appeal tothe National Company Law Appellate Tribunal.

(2) Every appeal under sub-section (1) shall be filed within thirtydays before the National Company Law Appellate Tribunal:

Provided that the National Company Law Appellate Tribunal mayallow an appeal to be filed after the expiry of the said period ofthirty days if it is satisfied that there was sufficient cause for notfiling the appeal but such period shall not exceed fifteen days.

[…]”

Sub-Section (2) of Section 61 provides for a limitation period ofthirty days. The proviso to Section 61(2) provides that NLCAT mayallow an appeal to be filed beyond a period of thirty days by a maximumof fifteen days on the demonstration of sufficient cause for the delay.

13. Section 238A, inserted in the IBC by the Insolvency andBankruptcy Code (Second Amendment) Act 2018,[8] contains a specificprovision in regard to the Limitation Act 1963. Section 238A provides 8 The Insolvency and Bankruptcy Code (Second Amendment) Act 2018, Act No. 26 of2018

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Athat the Limitation Act would inter alia apply “as far as may be” toappeals before the NCLAT:

“238A. Limitation — The provisions of the Limitation Act 1963,shall, as far as may be, apply to the proceedings or appeals beforethe Adjudicating Authority, the National Company Law AppellateBTribunal, the Debt Recovery Tribunal or the Debt RecoveryAppellate Tribunal, as the case may be.”

14. The Central Government, in exercise of the powers conferredby Section 469 of the Companies Act 2013, has formulated the NCLATRules 2016. Rule 3 of the NCLAT Rules 2016 stipulates that forcomputation of a time period as provided, the day from which the saidCperiod is to be reckoned shall be excluded. Rule 3 provides as follows:

“3. Computation of time period—Where a period is prescribedby the Act and these rules or under any other law or is fixed bythe Appellate Tribunal for doing any act, in computing the time,the day from which the said period is to be reckoned shall beDexcluded, and if the last day expires on a day when the office ofthe Appellate Tribunal is closed, that day and any succeeding dayon which the Appellate Tribunal remains closed shall also beexcluded.”

15. Part III of the NCLAT Rules 2016 deals with the procedureEfor the institution of appeals. Rule 22 provides that an appeal has to bepresented at the filing counter of the Appellate Tribunal, and should beaccompanied by a certified copy of the order under challenge. Rule 22provides that:

“—22. Presentation of appeal

F(1) Every appeal shall be presented in Form NCLAT-1 in triplicateby the appellant or petitioner or applicant or respondent, as thecase may be, in person or by his duly authorised representativeduly appointed in this behalf in the prescribed form with stipulatedfee at the filing counter and non-compliance of this may constitutea valid ground to refuse to entertain the same.G(2) Every appeal shall be accompanied by a certified copy of theimpugned order.

(3) All documents filed in the Appellate Tribunal shall beaccompanied by an index in triplicate containing their details andthe amount of fee paid thereon.

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(4) Sufficient number of copies of the appeal or petition orapplication shall also be filed for service on the opposite party asprescribed.

(5) In the pending matters, all other applications shall be presentedafter serving copies thereof in advance on the opposite side or hisadvocate or authorised representative.

(6) The processing fee prescribed by the rules, with requirednumber of envelopes of sufficient size and notice forms asprescribed shall be filled along with memorandum of appeal.”

16. In terms of Rule 103, the Appellate Tribunal may allow thefiling of an appeal or proceedings through electronic mode. Rule 103provides that:

“103. Filling through electronic media— The AppellateTribunal may allow filing of appeal or proceedings through electronicmode such as online filing and provide for rectification of defectsby e-mail or internet and in such filing, these rules shall be adoptedas nearly as possible on and form a date to be notified separatelyand the Central Government may issue instructions in this behalffrom time to time.”

17. On 3 January 2021, NCLAT notified a Revised SOP for thehearing of cases through the virtual mode, using its e-filing portal. TheSOP notices that an e-filing facility was available for filing of appealsand related documents, and exhorts “all concerned” to “avail the samethrough NCLAT e-filing portal”. The circular provides as follows:

“It may be noted that it is mandatory that Ld. Advocates/Authorised Representatives/ Parties-in-Person shall file theAppeal/Interlocutory Application/Reply/ Rejoinder etc. in hardcopy also as per the procedure prescribed in NCLAT Rules, 2016along with the e-filing receipt. The online filing & hard copiesmust match with proper pagination. The Court Fee shall be paidthrough Bharat Kosh (https://bharatkosh.gov.in) and the paymentreceipt should be attached.”

18. Subsequently, on 21 October 2022, the Registrar of NCLATissued another order[9] with regard to computing limitation for the purposeof filing an appeal before the Appellate Tribunal. The order notices that 9 NCLAT, F.No. 10/37/2018-NCLAT, dt. 21 October 2022

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Awhile Rule 22 of the NCLAT Rules 2016 provides for the presentationof an appeal at the filing counter of the NCLAT, Rule 103 permits thefiling of appeals or proceedings through the electronic mode. Afteradverting to the SOP dated 3 January 2021, the order indicates as follows:

“The SOPs and directions issued by the Appellate Tribunal do notBcontain any direction with regard to computation of limitation asto whether limitation is to be computed from the date of e-filing ofthe Appeals or from the date when Appeals are presented beforethe Appellate Tribunal as per Rule 22 of the NCLAT Rules, 2016.The Competent Authority has, therefore, decided to issue directionsin exercise of power conferred by Rule 104 of the NCLAT Rules,C2016 with regard to computation of limitation for the purposes offiling an Appeal in the Appellate Tribunal.

Hence, with regard to computation of limitation in Appeals,following directions are hereby issued by the Competent Authority:- D(1) The period of limitation shall be computed from the date ofpresentation of Appeal as per Rule 22 of the NCLAT Rules, 2016.

(2) The requirement of filing Appeals by electronic mode shallcontinue along with mandatory filing of the Appeals as per RuleE22 of the NCLAT Rules, 2016.(3) This order will be effective with effect from 1st November,2022.”

All concerned shall ensure that Appeals are presented as per Rule22 of the NCLAT Rules, 2016 within the period of limitation at theFfiling counter.”

19. The above order dated 21 October 2022 indicates that theSOPs and directions which were issued by the NCLAT did not containany provision for the computation of limitation, more specifically onwhether limitation has to be computed with reference to the date of e-Gfiling or from the date on which the appeal is presented before the NCLAT,in terms of Rule 22. Hence, in exercise of the power conferred by Rule104, it was notified that the period of limitation would be computed withreference to the date of the presentation of the appeal in terms of Rule22. Moreover, the requirement of filing appeals by the electronic modewas directed to continue together with the mandatory filing of appealsH

under Rule 22. The order dated 21 October 2022 was to be effectivefrom 1 November 2022.

20. Eventually, on 24 December 2022, another order was issuedby the Registrar of NCLAT in the following terms:

“It is seen that appeals are e-filed from different parts of thecountry where the appellant in some cases is located in far awayplaces and time is taken to file physical copy. It is further seenthat physical copy is filed within seven days of e-filing.

Hence, with regard to computation of limitation in Appeals,following directions are hereby issued by the CompetentAuthority: -

(1) The order F.No.10/37/2018-NCLAT dated 21.10.2022 ishereby withdrawn and superseded by this order.

(2) Limitation shall be computed from the date of e-filing. Thehard copy has to be filed within 7 days of e-filing. However, thecompetent authority is at liberty to notify to extend the period offiling hard copy in case of any unforeseen exigency. In a casewhere hard copy is filed after 7 days, the appeal will be placedbefore the Tribunal for appropriate order.

(3) The requirement of filing Appeals by electronic mode shallcontinue along with mandatory filing of the Appeals as per Rule22 of the NCLAT Rules, 2016.

(4) This order will be effective with immediate effect.

All concerned shall ensure that Appeals are presented as per Rule22 of the NCLAT Rules, 2016 within the period of limitation at thefiling counter.”

21. Hence, by the order dated 24 December 2022, it was clarifiedthat limitation shall be computed with reference to the date of e-filingwhile the physical copy would have to be filed within seven days of e-filing. The order clarifies that the requirement of filing appeals by theelectronic mode shall continue together with the mandatory filing ofappeals in terms of Rule 22 of the NCLAT Rules 2016.

22. Having regard to the above sequence of Rules andadministrative orders, it is evident that on the one hand, Rule 22 of theNCLAT Rules 2016 requires the presentation of an appeal at the filing A

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Acounter in the prescribed mode, but on the other, NCLAT also envisagese-filing of appeals. This is made evident in the SOP dated 3 January2021 which mandates the filing of a physical copy of an appeal as perthe procedure prescribed in the NCLAT Rules 2016, while referring tothe procedure for the hearing of cases through the virtual mode, usingBthe e-filing portal. The subsequent order dated 21 October 2022acknowledges that there was an absence of clarity in regard to the periodwith reference to which limitation would commence. Hence, the orderpurported to state that the period of limitation shall be computed fromthe date of the presentation of an appeal under Rule 22. Significantly,the above order was to be effective from 1 November 2022. In theCpresent case, admittedly, the appeal was e-filed on 10 October 2022 andeven a physical copy was lodged on 31 October 2022 prior to the dateon which the order of the Registrar dated 21 October 2022 was to comeinto effect. The order dated 21 October 2022 was subsequentlywithdrawn on 24 December 2022. The order dated 24 December 2022Dnow clarifies that limitation would be computed with effect from thedate of e-filing but a physical copy would have to be filed within sevendays of e-filing.

23. In the present case, the order was pronounced by the NCLTon 26 August 2022. Rule 3 of the NCLAT Rules 2016 stipulates thatEthe date from which the period of limitation has to be reckoned (i.e.,the date of the pronouncement of the order) would have to be excluded.Hence, the date on which the order was pronounced by the NCLT,namely 26 August 2022 would have to be excluded from thecomputation of limitation. This is in line with Section 12(1) of theLimitation Act 1963. As noted earlier, the provisions of the LimitationFAct 1963 are made applicable, inter alia, to appeals before the NCLATby virtue of Section 238A of the IBC. Section 12(1) of the LimitationAct 1963 provides as follows:

“—12. Exclusion of time in legal proceedings

(1) In computing the period of limitation for any suit, appeal orGapplication, the day from which such period is to be reckoned,shall be excluded.

[…]”

24. Between 26 August 2022, when the order was pronounced bythe NCLT, and 10 October 2022, when the appeal was e-filed, a periodHof 45 days elapsed after excluding the date on which the order was pronounced. The NCLAT has erroneously proceeded on the basis thatthe appeal was lodged on the 46[th] day whereas correctly computed, theappeal was lodged on the 45[th] day. This is evident from the followingtable:

25. The power of condoning a delay of up to 15 days beyond theoriginal period of 30 days lies within the discretionary power of theNCLAT. The appeal was instituted within the outer limit of 45 days.

26. Furthermore, in terms of Section 12(2) of the Limitation Act1963, the time requisite for obtaining a copy of the order appealed fromhas to be excluded while computing the period of limitation. TheExplanation to Section 12 clarifies that the time taken by the court toprepare an order before an application for a copy thereof is made shallnot be excluded. The relevant part of Section 12 provides as follows:

“12. Exclusion of time in legal proceedings.—

(1) ….

(2) In computing the period of limitation for an appeal or anapplication for leave to appeal or for revision or for review of ajudgment, the day on which the judgment complained of waspronounced and the time requisite for obtaining a copy of thedecree, sentence or order appealed from or sought to be revisedor reviewed shall be excluded.

(3) ….

(4) ….

Explanation.— In computing under this section the time requisitefor obtaining a copy of a decree or an order, any time taken by thecourt to prepare the decree or order before an application for acopy thereof is made shall not be excluded.”

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A27. In V Nagarajan (supra), a three judge Bench of this Courtobserved that Rule 22(2) of the NCLAT Rules 2016 mandates that anappeal has to be filed with a certified copy of the impugned order. TheCourt held that limitation commences once the order was pronouncedand the time taken by the court to provide the appellant with a certifiedcopy would be excluded, as clarified in Section 12(2) of the LimitationBAct 1963, if the appellant had applied for a certified copy within theprescribed period of limitation under Section 61(2) of the IBC. In thefacts of the case, this Court held that the appeal was barred by limitationas the appellant demonstrated no effort to secure a certified copy andonly relied on the date of the uploading of the order of the website. ThisCCourt held that:

29. On the question of a certified copy for filing an appeal againstan order passed by NCLT under IBC, Rule 22(2) ofthe NCLAT Rules mandates that an appeal has to be filedwith a certified copy of the “impugned order” […] Therefore,it cannot be said that the parties can automatically dispense withtheir obligation to apply for and obtain a certified copy for filing anappeal. Any delay in receipt of a certified copy, once anapplication has been filed, has been envisaged by thelegislature and duly excluded to not cause any prejudice toa litigant’s right to appeal.

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31. The import of Section 12 of the Limitation Act and itsExplanation is to assign the responsibility of applying for a certifiedcopy of the order on a party. A person wishing to file an appealis expected to file an application for a certified copy beforethe expiry of the limitation period, upon which the “timerequisite” for obtaining a copy is to be excluded. However,the time taken by the court to prepare the decree or order beforean application for a copy is made cannot be excluded. If noapplication for a certified copy has been made, no exclusion canensue. In fact, the Explanation to the provision is a clear indicatorof the legal position that the time which is taken by the court toprepare the decree or order cannot be excluded before theapplication to obtain a copy is made. It cannot be said that theright to receive a free copy under Section 420(3) of the Companies F

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Act obviated the obligation on the appellant to seek a certifiedcopy through an application. The appellant has urged that Rule 14of the NCLAT Rules empowers NCLAT to exempt parties fromcompliance with the requirement of any of the rules in the interestsof substantial justice, which has been typically exercised in favourof allowing a downloaded copy in lieu of a certified copy. Whileit may well be true that waivers on filing an appeal with acertified copy are often granted for the purposes of judicialdetermination, they do not confer an automatic right on anapplicant to dispense with compliance and render Rule 22(2)of the NCLAT Rules nugatory [….]

28. In the present case, the application for a certified copy wassent from Delhi to Chennai on 2 September 2022, which was receivedon 5 September 2022, within the period of limitation of 30 days specifiedin Section 61(2). This aspect lies in contrast to the facts as they obtainedbefore this Court in the judgment in V Nagarajan (supra) where eventhe application for obtaining the certified copy was not filed. In the presentcase, the appellant exercised due diligence and applied for a certifiedcopy upon pronouncement of the order in terms of Rule 22(2) of theNLCAT Rules 2016. The certified copy was provided to the appellanton 15 September 2022. Hence, the period of 10 days between 5September 2022 and 15 September 2022 taken by the court to provide acertified copy of the order ought to be excluded when determining theperiod of limitation under Section 61(2) of the IBC.

29. In view of the above discussion, we have come to the conclusionthat the NCLAT was in error in dismissing the appeal on the ground oflimitation. The explanation which was advanced by the appellant forcondoning the period of 5 days (beyond the period of 30 days stipulatedfor the filing of an appeal) was, in our view, sufficient and the delayshould have been condoned within the four corners of the statute.

30. Before concluding, we cannot but fail to notice the flip-flopson the part of the NCLAT in providing administrative guidance onwhether limitation would commence from the date of e-filing or fromthe presentation of the appeal at the filing counter. With technologicaladvances, the country’s judiciary and tribunals must move towards e-filing. This process has already commenced and is irreversible. The Union AB

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AGovernment must have a fresh look at the rules to encourage e-filingacross tribunals. Perhaps one way forward would be to constitute aWorking Group to make a comprehensive assessment of the positionacross tribunals and suggest regulatory changes. Moreover, it is utterlyincomprehensible why NCLAT should insist on physical filing in addition to e-filing. This unnecessarily burdens litigants and the Bar and is aBdisincentive for e-filing. A lawyer or litigant who is compelled to filephysical copies in addition to e-filed documents will have no cogent reasonto resort to e-filing. This duplication of effort is time consuming. It addsto expense. It leaves behind a carbon footprint which is difficult to efface.The judicial process has traditionally been guzzling paper. This model isCnot environmentally sustainable. If some judges are uncomfortable withe-files, the answer is to provide training to them and not to continue withold and outmoded ways of working. The judiciary has to modernize andadapt to technology. The tribunals can be no exception. This can nolonger be a matter of choice. The IBC is a significant prong in economic Dreforms. It has radically reshaped the law relating to insolvency andbankruptcy. The manner in which the law is administered will have tokeep pace with technology. Both the Union government in its rule makingcapacity and the administrative heads of tribunals must ensure a seamlesstransition to working in the electronic mode.

E31. A copy of this judgment shall be forwarded to the Chairpersonof the NCLAT and to the Secretaries to the Union Governmentrespectively in the Ministries of (i) Finance; (ii) Corporate Affairs; and(iii) Law and Justice for ensuring compliance and remedial steps.

32. We accordingly allow the appeal and set aside the order ofFthe NCLAT dated 9 January 2023.

33. The appeal shall accordingly be restored to the file of theNCLAT for disposal on merits.

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34. Pending application(s), if any, stand disposed of.

Nidhi Jain(Assisted by : Rakhi, LCRA)

Appeal allowed.

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