V NAGARAJAN versus SKS ISPAT AND POWER LTD.& ORS. on 22 October 2021

736

[2021] 14 S.C.R. 736

SUPREME COURT REPORTS

[2021] 14 S.C.R.

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V NAGARAJAN

v.

SKS ISPAT AND POWER LTD.& ORS.

(Civil Appeal No. 3327 of 2020)

BOCTOBER 22, 2021

[DR. DHANANJAYA Y. CHANDRACHUD, VIKRAM NATHAND B.V.NAGARATHNA, JJ.]

Insolvency and Bankruptcy Code, 2016 – ss.61(1), 238, 238-CA – Limitation Act, 1963 – ss.12(2), 29(2) – Companies Act 2013 –s.420(3) – National Company Law Tribunal Rules, 2016 – r.50 –National Company Law Appellate Tribunal Rules – r.22 – NCLTvide order dtd. 31.12.19 dismissed the appellant’s application in aliquidation proceeding, seeking interim relief against invocation ofa bank guarantee by Respondent No.10 against the CorporateDDebtor – Appellant filed appeal, dismissed by NCLAT as barred bylimitation – On appeal, held: Owing to the special nature of theIBC, the aggrieved party is expected to exercise due diligence andapply for a certified copy upon pronouncement of the order it seeksto assail, in consonance with the requirements of r.22(2), NCLATRules – s.12(2), Limitation Act allows for an exclusion of the timeErequisite for obtaining a copy of the decree or order appealedagainst – It is not open to a person aggrieved by an order underthe IBC to await the receipt of a free certified copy u/s.420(3),Companies Act, 2013 r/w r.50 of the NCLT and prevent limitationfrom running – No effort made on the part of the appellant to secureFa certified copy of the said order, relied on the date of the uploadingof the order (12.03.20) on the website – Period of limitation forfiling an appeal u/s.61(1) against the order of the NCLT dtd.31.12.19, expired on 30.01.20 in view of the thirty-day periodprescribed u/s.61(2) – Any scope for a condonation of delay expiredon 14.02.20, in view of the outer limit of fifteen days prescribedGunder the proviso to s.61(2) – NCLAT correctly dismissed the appealon limitation.

Insolvency and Bankruptcy Code, 2016 – s.61(1) – Limitationperiod for filing an appeal against order of NCLT – Held: Litiganthas to file its appeal within thirty days, which can be extended upH

to a period of fifteen days, and no more, upon showing sufficientcause – Court is not empowered to condone delays beyond statutoryprescriptions in special statutes containing a provision for limitation.

Insolvency and Bankruptcy Code, 2016 – s.61(2) – CompaniesAct 2013 – s.420(3) – National Company Law Tribunal Rules, 2016– r.50 – Held: s.420(3), Companies Act r/w r.50, NCLT Rules enablesa party to compute limitation from the date of receipt of the statutorilymandated free certified copy, without having to file its ownapplication – However, Sagufa Ahmed v. Upper Assam PlywoodProducts Pvt Ltd clarified that the statutory mandate of a free copyis not to enable litigants to take two bites at the apple where theycould compute limitation from either when the certified copy isreceived on the litigant’s application or received as a free copyfrom the registry- whichever is later.

Insolvency and Bankruptcy Code, 2016 – National CompanyLaw Appellate Tribunal Rules – rr.14, 22 – Order passed under IBC– Appeal to NCLAT – Annexation of certified copy, if mandatory –Held: r.22(2) of the NCLAT Rules mandates the certified copy beingannexed to an appeal, which continues to bind litigants under theIBC – While it is true that the tribunals, and even Supreme Court,may choose to exempt parties from compliance with this proceduralrequirement in the interest of substantial justice, as re-iterated inr.14 of the NCLAT Rules, the discretionary waiver does not act asan automatic exception where litigants make no efforts to pursue atimely resolution of their grievance – Companies Act, 2013 – s.420(3).

Insolvency and Bankruptcy Code, 2016 – ss.61(1), (2) –Companies Act 2013 – s.421(3) – Held: ss.61(1) and (2) of the IBCconsciously omit the requirement of limitation being computed fromwhen the “order is made available to the aggrieved party”, incontradistinction to s.421(3) of the Companies Act.

Code of Civil Procedure, 1908 – s.9 – Right to file suit andthe right to file appeal – Distinction between – Discussed –Insolvency and Bankruptcy Code, 2016 – ss.60, 61(1), (2), 62 and63.

Insolvency and Bankruptcy Code, 2016 – s.61(2) – LimitationAct, 1963 – s.12 – Held: s.12 provides guidance on reckoning theperiod of limitation and excludes the time taken by a party for AB

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Aobtaining a certified copy of the order it seeks to appeal – However,the explanation clarifies that the time taken by the court in preparingthe order before an application for a copy is filed by the aggrievedparty, is not excluded from the computation of limitation.

National Company Law Appellate Tribunal Rules – rr.14, 22B– Held: It 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 an applicantto dispense with compliance and render r.22(2), NCLAT Rulesnugatory.

CWords & Phrases – “from the date on which a copy of theorder of the Tribunal is made available to the person aggrieved” –Absence of – Insolvency and Bankruptcy Code, 2016 – s.61(1) –Companies Act 2013 – ss.420(3), 421(3) – Held: Difference betweens.421(3), Companies Act and s.61(2), IBC is in the absence of theaforesaid words in the latter – Absence of these words cannot beDconstrued as a mere omission which can be supplemented with aright to a free copy u/s.420(3)r/w r.50 of the NCLT Rules for thepurposes of reckoning limitation.

Dismissing the appeal, the Court

EHELD: 1.1 The IBC is a complete code. It has anoverriding effect, as stated in Section 238. On the specific questionof limitation, Section 238-A of the IBC invokes the LimitationAct to the extent it is applicable. The aforesaid sections of IBChave to be read in juxtaposition with Section 29(2), of theLimitation Act. The salient aspects of Section 29(2) of theFLimitation Act are three fold- (i) prescription of a period oflimitation under any special law or local law may differ from theperiod prescribed by the Schedule under the Limitation Act; (ii)in such a case, the period of limitation prescribed under thespecial or local law shall be deemed to be period prescribed forGthe purpose of Section 3 of the Limitation Act; and (iii) Section 3of the Limitation Act shall apply accordingly. [Para 9][752-F;753-E-F]

1.2 An appeal is a creature of statute, hence there is afundamental distinction between the right to file a suit and theright to file an appeal. In terms of Section 9 of the Code of CivilH

Procedure, 1908, there is an inherent right to bring a suit of acivil nature, unless the suit is barred by statute. On the otherhand, an appeal is a creature of statute and must have the clearauthority of law. The IBC envisages a comprehensive disputeresolution process in Chapter VI. The NCLT is the empowered‘Adjudicating Authority’ under Section 60 of the IBC with thejurisdiction to entertain any proceeding in relation to insolvencyresolution or liquidation proceedings under the IBC. An appeallies against an order of the Adjudicating Authority to the AppellateAuthority, the NCLAT, under Section 61(1) of the IBC. An orderof the NCLAT is subject to an appeal on a question of law to theSupreme Court under Section 62. The jurisdiction of civil courtshas been explicitly ousted by Section 63 of the IBC. Section 61(2)specifically provides for a limitation period of thirty days, whichcan be extended by a maximum of fifteen days on thedemonstration of sufficient cause for the delay. Section 420 ofthe Companies Act deals with the orders of the NCLT and createsa right to receive a copy to every party under Section 420(3).Section 421(3) of the Companies Act prescribes the period oflimitation for filing an appeal to the NCLAT and specifies thatthe computation shall be made from the date when a copy is “madeavailable to the person aggrieved”. Rule 50 of the NCLT Rulesoperationalises Section 421(3) of the Companies Act by mandatingthe Registry of the NCLT to share a free certified copy of theorder to the parties. [Paras 11, 13][754-A-D; 755-F-H; 756-G]

B K Educational Services (P) Ltd v. Parag Gupta andAssociates 2019 (11) SCC 633 : [2018] 12 SCR 794 –relied on.

1.3 In a field which is not covered by a special law whichinvests the NCLT with jurisdiction, the general principle for thecomputation of limitation for filing an appeal against an order ofthe NCLT is governed by the statutory mandate of Section 420(3)of the Companies Act read with Rule 50 of the NCLT Rules,which enables a party to compute limitation from the date ofreceipt of the statutorily mandated free certified copy, withouthaving to file its own application. However, the decision of thisCourt in Sagufa Ahmed clarifies that the statutory mandate of a ABC

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Afree copy is not to enable litigants to take two bites at the applewhere they could compute limitation from either when thecertified copy is received on the litigant’s application or receivedas a free copy from the registry - whichever is later. [Para 14][758-B-D]

BSagufa Ahmed v. Upper Assam Plywood Products PvtLtd 2021 (2) SCC 317 : [2020] 9 JT 429 – relied on.

1.4 The IBC is a complete code in itself and over-rides anyinconsistencies that may arise in the application of other laws.Section 61 of the IBC, begins with a non-obstante provision -C“notwithstanding anything to the contrary contained under theCompanies Act, 2013” when prescribing the right of an aggrievedparty to file an appeal before the NCLAT along within thestipulated period of limitation. The notable difference betweenSection 421(3) of the Companies Act and Section 61(2) of theIBC is in the absence of the words “from the date on which aDcopy of the order of the Tribunal is made available to the personaggrieved” in the latter. The absence of these words cannot beconstrued as a mere omission which can be supplemented with aright to a free copy under Section 420(3) of the Companies Actread with Rule 50 of the NCLT Rules for the purposes ofEreckoning limitation. This would ignore the context of the IBC’sprovisions and the purpose of the legislation. When timelinesare placed even on legal proceedings, reading in the requirementof an “order being made available” under a generalenactment (Companies Act) would do violence to the specialprovisions enacted under the IBC where timing is critical for theFworkability of the mechanism, health of the economy, recoveryrate of lenders and valuation of the corporate debtor. The IBC,as a prescriptive mechanism, affecting rights of stakeholders whoare not necessarily parties to the proceedings, mandates diligenceon the part of applicants who are aggrieved by the outcome ofGtheir litigation. An appeal, if considered necessary and expedientby an aggrieved party, is expected to be filed forthwith withoutawaiting a free copy which may be received at an indefinite stage.Hence, the omission of the words “from the date on which theorder is made available” for the purposes of computation oflimitation in Section 61(2) of the IBC, is a consistent signal of theH

intention of the legislature to nudge the parties to be proactiveand facilitate timely resolution. [Paras 15, 17][758-E-G;761-F-H; 762-A-B]

1.5 On the question of a certified copy for filing an appealagainst an order passed by the NCLT under the IBC, Rule 22(2)of the NCLAT Rules mandates that an appeal has to be filed witha certified copy of the ‘impugned order’. Therefore, it cannot besaid that the parties can automatically dispense with theirobligation to apply for and obtain a certified copy for filing anappeal. Any delay in receipt of a certified copy, once an applicationhas been filed, have been envisaged by the legislature and dulyexcluded to not cause any prejudice to a litigant’s right to appeal.Section 12 of the Limitation Act provides guidance on reckoningthe period of limitation and excludes the time taken by a partyfor obtaining a certified copy of the order it seeks to appeal.However, the explanation clarifies that the time taken by the courtin preparing the order before an application for a copy is filed bythe aggrieved party, is not excluded from the computation oflimitation. 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 appeal isexpected to file an application for a certified copy before the expiryof the limitation period, upon which the “time requisite” forobtaining a copy is to be excluded. However, the time taken bythe court to prepare the decree or order before an applicationfor a copy is made cannot be excluded. If no application for acertified copy has been made, no exclusion can ensue. In fact,the explanation to the provision is a clear indicator of the legalposition that the time which is taken by the court to prepare thedecree or order cannot be excluded before the application toobtain a copy is made. It cannot be said that the right to receivea free copy under Section 420(3) of the Companies Act obviatedthe obligation on the appellant to seek a certified copy throughan application. The appellant has urged that Rule 14 of the NCLATRules empowers the NCLAT to exempt parties from compliancewith the requirement of any of the rules in the interests ofsubstantial justice, which has been typically exercised in favourof allowing a downloaded copy in lieu of a certified copy. While it AB

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Amay well be true that waivers on filing an appeal with a certifiedcopy are often granted for the purposes of judicial determination,they do not confer an automatic right on an applicant to dispensewith compliance and render Rule 22(2) of the NCLAT Rulesnugatory. The act of filing an application for a certified copy is notjust a technical requirement for computation of limitation but alsoBan indication of the diligence of the aggrieved party in pursuingthe litigation in a timely fashion. [Paras 18, 19][762-B, E-F;763-B-D; 764-A-B]

1.6 The appellant submitted that the suo motu order of thisCourt dated 23 March 2020, taking retrospective effect from 15CMarch 2020, made under Article 142 of the Constitution,extended the limitation until further orders, which renders theappeal filed on 8 June 2020 within limitation. This Court had onlyextended the periodof limitation applicable in the proceedings,only in cases where such period had not ended before 15 MarchD2020. In this case, owing to the specific language of Section 61(1)and 61(2), it is evident that limitation commenced once the orderwas pronounced and the time taken by the Court to provide theappellant with a certified copy would have been excluded, asclarified in Section 12(2) of the Limitation Act, if the appellanthad applied for a certified copy within the prescribed period ofElimitation under Section 61(2) of the IBC. The construction ofthe law does not import the absurdity the appellant alleges of animpossible act of filing an appeal against an order which wasuploaded on 12 March 2020. However, the mandate of the law isto impose an obligation on the appellant to apply for a certified

Fcopy once the order was pronounced by the NCLT on 31December 2019, by virtue of Section 61(2) of the IBC read withRule 22(2) of the NCLAT Rules. The Court is not empowered tocondone delays beyond statutory prescriptions in special statutescontaining a provision for limitation. [Para 20][764-C-G;765-A-B]G

1.7 The answer to the two issues - (i) when will the clockfor calculating the limitation period run for proceedings underthe IBC; and (ii) is the annexation of a certified copy mandatoryfor an appeal to the NCLAT against an order passed under theIBC – must be based on a harmonious interpretation of theHapplicable legal regime, given that the IBC is a Code in itself and has overriding effect. Sections 61(1) and (2) of the IBCconsciously omit the requirement of limitation being computedfrom when the “order is made available to the aggrieved party”,in contradistinction to Section 421(3) of the Companies Act. Owingto the special nature of the IBC, the aggrieved party is expectedto exercise due diligence and apply for a certified copy uponpronouncement of the order it seeks to assail, in consonancewith the requirements of Rule 22(2) of the NCLAT Rules. Section12(2) of the Limitation Act allows for an exclusion of the timerequisite for obtaining a copy of the decree or order appealedagainst. It is not open to a person aggrieved by an order underthe IBC to await the receipt of a free certified copy under Section420(3) of the Companies Act 2013 read with Rule 50 of the NCLTand prevent limitation from running. Accepting such aconstruction will upset the timely framework of the IBC. Thelitigant has to file its appeal within thirty days, which can beextended up to a period of fifteen days, and no more, upon showingsufficient cause. A sleight of interpretation of procedural rulescannot be used to defeat the substantive objective of a legislationthat has an impact on the economic health of a nation. On thesecond question, Rule 22(2) of the NCLAT Rules mandates thecertified copy being annexed to an appeal, which continues tobind litigants under the IBC. While it is true that the tribunals,and even this Court, may choose to exempt parties fromcompliance with this procedural requirement in the interest ofsubstantial justice, as re-iterated in Rule 14 of the NCLAT Rules,the discretionary waiver does not act as an automatic exceptionwhere litigants make no efforts to pursue a timely resolution oftheir grievance. The appellant having failed to apply for a certifiedcopy, rendered the appeal filed before the NCLAT as clearlybarred by limitation. [Paras 21, 22][765-C-G; 766-A-C]

Ebix Singapore Private Ltd v. Committee of Creditorsof Educomp Solutions Ltd. 2021 SCCOnLine SC 707;Mobilox Innovations Private Ltd v. Kirusa SoftwarePrivate Ltd (2018) 1 SCC 353 : [2017] 10 SCR 1006;Kalpraj Dharamshi v. Kotak Investment Advisors Ltd2021 SCC OnLine SC 204 – relied on.

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AIn re: Cognizance for Extension of Limitation (2020)19 SCC 10; Essar Steel India Ltd v. Satish Kumar Gupta(2020) 8 SCC 531 : [2019] 16 SCR 275; Pr. DirectorGeneral of Income Tax v. Spartek Ceramics India Ltd2018 SCC OnLine NCLAT 289; Garikapati Veerayav. Subbaiah Chaudhry, AIR 1957 SC 540; Ganga BaiBv. Vijay Kumar, (1974) 2 SCC 393; Anant MillsCompany Limited v. State of Gujarat, AIR 1975 SC1234; Innoventive Industries Ltd v. ICICI Bank, (2018)1 SCC 407; Gujarat Urja Vikas Nigam Ltd v. AmitGupta, (2021) SCC OnLine 194; Prowess InternationalCPvt Ltd v. Action Ispat & Power Pvt Ltd, Company Appeal(AT) (Insolvency) 223 of 2017 (NCLAT, 26 March2018); Union of India v. Popular Construction Co.,(2001) 8 SCC 470 : [2001] 3 Suppl. SCR 619; SinghEnterprises v. Commissioner of Central Excise,Jamshedpur, (2008) 3 SCC 70 : [2007] 13 SCR 952;DChhattisgarh State Electricity Board v. CentralElectricity Regulatory Commission, (2010) 5 SCC 23 :[2010] 4 SCR 680; Bengal Chemists and DruggistsAssociation v. Kalyan Chowdhury, (2018) 3 SCC 41 :[2018] 2 SCR 1099 – referred to.

ECase Law Reference

ECase Law Reference

From the Judgment and Order dated 17.03.2020 of the NationalCompany Law Appellate Tribunal at New Delhi in Company Appeal(AT) (Ins) No.561 of 2020.

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Neeraj Kishan Kaul, Sr. Adv., Atul Shanker Mathur, Ms. PriyaSingh, Amlaan Kumar for M/s Khaitan & Co., Neeraj Chaudhari, Ms.Pooja Dhar, Abhijit Sengupta, Ram Lal Roy, Advs. for the Respondents.

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

This judgment has been divided into sections* to facilitate analysis.

AFacts..........................................................................2

BSubmissions of Parties..................................................5

B.1Appellant’s submissions......................................5

B.2Respondent’s submissions.....................................9

CAnalysis....................................................................12

DConclusion................................................................28

A Facts

1. This appeal arises under Section 62 of the Insolvency andBankruptcy Code 2016[1] from the judgement of the National CompanyLaw Appellate Tribunal, Delhi[2] dated 13 July 2020[3]. The NCLATdismissed the appeal as barred by limitation. The appellant had filed anappeal against the National Company Law Tribunal, Chennai’s[4] orderdated 31 December 2019[5] which had dismissed the appellant’smiscellaneous application in a liquidation proceeding, seeking interim reliefagainst the invocation of a bank guarantee by Respondent No. 10 againstthe Corporate Debtor.

2. Cethar Ltd[6], a corporate entity which is engaged in engineeringand project consultancy, is undergoing liquidation. The appellant wasappointed as its interim resolution professional and resolution professional.After an unsuccessful attempt at resolution, the appellant was appointedas its liquidator on 25 April 2018. The appellant instituted proceedings[7]under Sections 43 and 45 of the IBC to avoid preferential and undervalued *Ed. Note : The Page Nos. mentioned alongside the respective sections are as per theOriginal Judgment.

1 “IBC”

2 “NCLAT”

3 Company Appeal (AT) (Insolvency) 561 of 2020

4 “NCLT”

5 MA 906 of 2019 in CA/38/IB/2018 (NCLT, Chennai Bench)

6 “Corporate Debtor”

7 CA/38/IB/2018 (NCLT, Chennai Bench)

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Atransactions of the Corporate Debtor in favour of Respondent Nos 1-4with respect to a contract dated 15 March 2011. No relief was soughtagainst Respondent No 10. The appellant claims to have subsequentlydiscovered that SKS Ispat and Power Ltd (Respondent No 1) and itssubsidiary- SKS Power Generation Chhattisgarh Ltd (Respondent No10) had colluded with the promoters of the Corporate Debtor andBdefrauded the latter of over INR 400 crores by entering into a fraudulentsettlement of only INR 4.58 crores. The appellant also alleges that thesetransactions form a part of the ongoing investigation by the Central Bureauof Investigations and the Enforcement Directorate. Respondent No 10,allegedly at the behest of Respondent No 1, sought to invoke certainCbank guarantees issued by the Corporate Debtor for its failure to performits engineering services. The appellant filed a Miscellaneous Applicationto resist the invocation of this performance guarantee until the liquidationproceedings are concluded.

3. On 31 December 2019, the NCLT held that the performanceDguarantees were not a part of ‘Security Interest’, as defined under Section3(31) of the IBC and refused to grant an injunction against the invocationof the bank guarantee until the liquidation proceedings are complete.The appellant has not disputed his presence before the NCLT when thisorder was pronounced in open court. However, the appellant states thata copy of the NCLT’s order dated 31 December 2019 was uploaded onEthe NCLT website only on 12 March 2020. However, the uploaded orderset out the incorrect name of the Judicial member who had passed theorder. The corrected order was uploaded on 20 March 2020. Subsequentto the corrected order being uploaded, the appellant claims to haveawaited the issue of a free copy and allegedly sought the free copy onF23 March 2020, under the provisions of Section 420(3) of the CompaniesAct, 2013[8] read with Rule 50 of the National Company Law TribunalRules, 2016[9]. According to the appellant, the free copy has not beenissued till date. The appellant has stated that owing to the lockdown onaccount of the COVID-19 pandemic, the appeal before the NCLAT

was filed on 8 June 2020 with an application for exemption from filing aGcertified copy of the order as it had not been issued.

4. The NCLAT’S impugned order dated 13 July 2020, relied onSection 61(2) of the IBC which mandates a limitation period for appeals 8 “Companies Act”H9 “NCLT Rules”

to be thirty days, extendable by fifteen days, to hold that the appeal filedunder Section 61(1) was barred by limitation. It noted that the statutorytime limit of thirty days had expired and an application for condonationof delay had not been filed. Rule 22 of the National Company LawAppellate Tribunal Rules[10] provides that every appeal must beaccompanied with a certified copy of the impugned order, which had notbeen annexed in this case. The NCLAT observed that the appellant hadnot provided any evidence to prove that a certified or free copy had notbeen issued to him. In any event, the IBC circumscribes the discretionto condone delays up to fifteen days, which had elapsed in this case.Further, it noted that even on merits, there were no grounds forinterference since a performance guarantee is explicitly excluded fromthe ambit of a ‘Security interest’ which is subject to a moratorium underSection 14 of the IBC. The appellant filed a Civil Appeal against thisorder of the NCLAT on the question of limitation.

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B Submissions of Parties

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B.1 Appellant’s submissions

5. Mr. R Subramanian, appearing on behalf of the appellants hasurged the following submissions:

a)The order was passed by the NCLT on 31 December 2019,but the constitution of the bench was changed shortlyEthereafter. The copy of the order was not uploaded until 11or 12 March 2020. Even on 12 March 2020, a defectivecopy of the order was uploaded with the incorrect benchcomposition. The corrected copy was uploaded only on 20March 2020. The appellant requested the NCLT registryFfor a free copy on 23 March 2020. The NCLAT was shuton account of the COVID-19 pandemic from 24 March2020 and an SOP for commencement of virtual hearingswas issued on 30 May 2020. The appellant immediatelyfiled an appeal on 8 June 2020 with a downloaded copy,relying on this Court’s suo motu order dated 15 March 2020Gextending limitation and the lack of receipt of a free certifiedcopy; G

10 “NCLAT Rules”

748SUPREME COURT REPORTS

Ab)The NCLT order was uploaded only on 12 March 2020.This Court, in its suo motu order dated 23 March 2020[11]had stopped the clock of limitation with effect from 15March 2020 on account of the COVID-19 pandemic.Therefore, the appeal was de jure filed within three daysof the order being received, which is within the thirty dayBlimitation period prescribed under Section 61 of the IBC;

c)Rule 22 of the NCLAT Rules mandates a certified copy ofthe order for filing an appeal. However, Rule 14 of theNCLAT Rules permits a waiver from compliance with anyof the rules, which has been usually granted in case of aCdownloaded online copy, in lieu of a certified copy of theorder. The appellant’s appeal was not found defective underRules 26 and 27 of the NCLAT Rules as an application forwaiver of filing a certified copy was duly filed and allowed; d)Section 420(3) of the Companies Act read with Rule 50 ofDthe NCLT Rules mandates a free copy of an order to beissued to every party. This obviates the need for any partyto obtain a certified copy of an order it seeks to impugn byway of an appeal. Therefore, the clock of limitation underSection 61 of the IBC would run from the date the freeEcopy is issued to the party. A three judge bench of this Courtin Sagufa Ahmed v. Upper Assam Plywood ProductsPvt Ltd[12], albeit in the context of a case under the CompaniesAct, had held that the limitation period would run only fromthe date on which a copy of the order is made available tothe aggrieved party. Even a delay in applying for a certifiedFcopy would not attract the explanation to Section 12 of theLimitation Act when a free copy is statutorily mandated; e)Section 420(3) of the Companies Act and Rule 50 of theNCLT Rules equally apply to proceedings under the IBCand the ratio in Sagufa Ahmed (supra) would squarely apply.GThe mere absence of the words “from the date on whicha copy of the order of the Tribunal is made available to 11 In re: Cognizance for Extension of Limitation, (2020) 19 SCC 10 (“suo motuorder“)H12 2021 (2) SCC 317 (“Sagufa Ahmed“)

the person aggrieved” in Section 61(2) of the IBC, inAcontradistinction to Section 421(3) of the Companies Act,has no material bearing since an appeal cannot be filedwithout a copy of the order. This Court in B K EducationalServices (P) Ltd v. Parag Gupta and Associates[13] hadnoted that the provisions of Chapter XXVII of theBCompanies Act would apply to proceedings under the IBCat the NCLT, as Section 408 of the Companies Actconstitutes the NCLT to discharge authority under theCompanies Act, and under ‘any other law for the time beingin force’; A

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f)Appellants seeking to assail orders of judicial forums thatupload copies of their orders on their website are usuallyexempt from filing a certified copy and the limitationcommences only from the date of the uploading of the orderonline. Rule 14 of the NCLAT Rules envisage a waiverfrom procedural requirements as well; D

g)Section 12(2) of the Limitation Act, 1963[14] applies fromthe date on which the copy of the order is made availableand not from the date when such order is passed. Theexplanation to Section 12(2) of the Limitation Act wouldnot be attracted in cases where a free copy is mandatedby the statute and online copies can be used for filing anappeal. The explanation to Section 12(2) of the LimitationAct would apply only where no appeal can be filed withoutan application for, and furnishing of a certified copy. Inany event, Section 12(2) of the Limitation Act excludesthe time taken from the date of order to it becomingavailable; E

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h)Section 61 of the IBC prescribing a limitation period issubservient to the principle of lex non cogit ad impossibiliawhich states that the law cannot mandate a person to do animpossible act. In this case, the appellant cannot be expectedto file an appeal within 30 days when the order is notavailable; G

13 2019 (11) SCC 633 (“B K Educational Services“)

14 “Limitation Act”

Ai)An application for condonation of delay was not requiredwhen the appellant had instituted the appeal in time andwas statutorily entitled to a free certified copy. The appellantis protected by the principles of actus curiae neminemgravabit- no person should suffer for an act of Court,especially when INR 180 crores owed to public sector banksBis at stake; and j)The NCLAT had not heard any arguments on limitationbefore reserving its orders, and yet has passed an orderprimarily dismissing the appeal on the ground of limitation.Furthermore, when an appeal is barred by limitation, theCcourt cannot delve into the merits or set out any findings onmerits which has been done in this case.

B.2 Respondent’s submissions

6. Mr. Neeraj Kishan Kaul, Senior Counsel appearing on behalfof Respondent No 10 has urged the following submissions:D

(a) Section 61 of the IBC mandates an appeal against any orderunder the Act to be filed within 30 days, extendable by amaximum period of 15 days. The limitation for challengingthe NCLT order dated 31 December 2019 expired on 15February 2020, even after accounting for the fifteen dayEextension which is granted as a matter of discretion underSection 61(2); (b)Section 61(2) of the IBC does not state that limitation is tobe applicable from the date of the order being ‘madeavailable’, as against Section 421(3) of the Companies Act.FSpecial Acts override general enactments. In any event,“made available” does not imply that parties can indefinitelywait until a free certified copy is provided to them. A timelyapplication for a certified copy has to be filed;

(c) It is undisputed that NCLT’s order dated 31 December 2019Gwas dictated and pronounced in open court, where theappellant was present. The NCLAT in Pr. Director Generalof Income Tax v. Spartek Ceramics India Ltd[15]has heldthat the period of thirty days for filing an appeal commencesfrom the date of the ‘knowledge’ of the order; H15 2018 SCC OnLine NCLAT 289

(d) The appellant’s assertion that the NCLT’s order wasuploaded only on 20 March 2020 is unsubstantiated; A

(e) Section 12 of the Limitation Act is clear in prescribingthat the limitation period can be ascertained only after anapplication for a certified copy of the judgement or orderis filed within the limitation period, in order to not beBdeclared as time barred. The time period of limitation caneither be calculated from the date of the order, 31December 2019 in this case, or from the date of filing anapplication for a certified copy of the said order. In theabsence of compliance with either, any appeal will beCdeemed as barred by limitation; (f)Rule 22 of the NCLAT Rules prescribes that an appeal hasto be accompanied with a certified copy of the order. Theappellant did not file for a certified copy of the NCLT order.Yet, the appellant instituted its appeal before the NCLATon the basis of an online copy without an application seekingexemption from filing a certified copy or an applicationseeking condonation of delay; D

(g) The appellant should have either waited to receive the freecertified copy from the NCLT as per Section 420(3) of theCompanies Act or applied for a certified copy within thelimitation period. The appellant cannot be allowed toselectively take shelter under one provision; E

(h) Time is of the essence under the IBC, as observed by thisCourt in Ebix Singapore Private Ltd v. Committee ofCreditors of Educomp Solutions Ltd[16]and theBankruptcy Law Reform Committee Report, 2015. The IBCand the Arbitration and Conciliation Act, 2015 are specialenactments which have been typically interpreted with strictlimitation periods; F

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(i) Diligence is expected of the aggrieved party under the IBCwhere time is of the essence. Sagufa Ahmed (supra) wasin the context of a winding up case which operates in aregime different from the IBC; A(j)In Mobilox Innovations Private Ltd v. Kirusa SoftwarePrivate Ltd[17]this Court observed, in the context of appeals,that timelines are sacrosanct under the IBC as it is in thebest interests of all the stakeholders of the process thatresolution or liquidation of the company happens in a timebound manner and is not protracted; andB

(k) Respondent No 1 and Respondent No 10 are separateentities with different promoters. No reliefs were soughtagainst Respondent No 10 in the company petition filed bythe appellant in respect of an agreement dated 15 March2011, to which Respondent No 10 is not a party. The NCLTCand NCLAT have issued concurrent findings that aperformance guarantee is not a ‘security interest’ which issubject to a moratorium under Section 14 of the IBC.Therefore, no grounds for interference on merits areestablished.

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7. The rival submissions fall for our consideration.

C Analysis

8. At the outset, as clarified by the parties, only submissions onthe aspect of limitation have been pressed. The finding of this Court isElimited to a determination on whether the appeal before the NCLATunder Section 61(1) of the IBC was barred by limitation.

9. The present dispute arises over the period of limitation applicablefor filing an appeal against an order of the NCLT under the IBC. Theprovisions of the IBC, Companies Act, Limitation Act, NCLT Rules andFthe NCLAT Rules have been placed before this Court during the hearing.The relevant provisions are extracted below and are referred to, in turn.The IBC is a complete code. It has an overriding effect, as stated inSection 238 :

“238. Provisions of this Code to override other laws.—TheGprovisions of this Code shall have effect, notwithstanding anythinginconsistent therewith contained in any other law for the timebeing in force or any instrument having effect by virtue of anysuch law.”

H17 (2018) 1 SCC 353 (“Mobilox Innovations“)

On the specific question of limitation, Section 238-A of the IBCinvokes the Limitation Act to the extent it is applicable:

“238-A. Limitation.—The provisions of the Limitation Act, 1963(36 of 1963) shall, as far as may be, apply to the proceedings orappeals before the Adjudicating Authority, the National CompanyLaw Appellate Tribunal, the Debt Recovery Tribunal or the DebtRecovery Appellate Tribunal, as the case may be.”

The aforesaid sections of IBC have to be read in juxtapositionwith Section 29(2) , of the Limitation Act:

“29. Savings.—

(….)

(2) Where any special or local law prescribes for any suit, appealor application a period of limitation different from the periodprescribed by the Schedule, the provisions of Section 3 shall applyas if such period were the period prescribed by the Schedule andfor the purpose of determining any period of limitation prescribedfor any suit, appeal or application by any special or local law, theprovisions contained in Sections 4 to 24 (inclusive) shall applyonly insofar as, and to the extent to which, they are not expresslyexcluded by such special or local law…”

The salient aspects of Section 29(2) of the Limitation Act arethree fold- (i) prescription of a period of limitation under any special lawor local law may differ from the period prescribed by the Schedule underthe Limitation Act; (ii) in such a case, the period of limitation prescribedunder the special or local law shall be deemed to be period prescribedfor the purpose of Section 3 of the Limitation Act; and (iii) Section 3 ofthe Limitation Act shall apply accordingly.

10. For determining the present appeal, the question of limitationfor filing appeals would have to be answered by construing the provisionsof the IBC and the Limitation Act, with the former enactment having anoverriding effect. This position has also been adopted by a three judgebench of this Court in Kalpraj Dharamshi v. Kotak InvestmentAdvisors Ltd[18] in considering the applicability of Section 14 of theLimitation Act to the reckoning of limitation for an appeal filed underSection 61(1) of the IBC.

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A11. An appeal is a creature of statute, hence there is a fundamentaldistinction between the right to file a suit and the right to file an appeal.In terms of Section 9 of the Code of Civil Procedure, 1908, there is aninherent right to bring a suit of a civil nature, unless the suit is barred bystatute. On the other hand, an appeal is a creature of statute and musthave the clear authority of law.[19] The IBC envisages a comprehensiveBdispute resolution process in Chapter VI. The NCLT is the empowered‘Adjudicating Authority’ under Section 60 of the IBC with the jurisdictionto entertain any proceeding in relation to insolvency resolution orliquidation proceedings under the IBC. An appeal lies against an orderof the Adjudicating Authority to the Appellate Authority, the NCLAT,Cunder Section 61(1) of the IBC. An order of the NCLAT is subject to anappeal on a question of law to the Supreme Court under Section 62. Thejurisdiction of civil courts has been explicitly ousted by Section 63 of theIBC. In the present case, the appellant was aggrieved by an order of theNCLT passed under the IBC. His right to file an appeal arose fromSection 61 of the IBC which is in the following terms:D“61. Appeals and Appellate Authority.—(1) Notwithstandinganything to the contrary contained under the Companies Act, 2013,any person aggrieved by the order of the Adjudicating Authorityunder this part may prefer an appeal to the National CompanyLaw Appellate Tribunal.E(2) Every appeal under sub-section (1) shall be filed withinthirty days before the National Company Law Appellate Tribunal:

Provided that the National Company Law Appellate Tribunalmay allow an appeal to be filed after the expiry of the saidFperiod of thirty days if it is satisfied that there was sufficientcause for not filing the appeal but such period shall notexceed fifteen days…….”

Section 61(2) specifically provides for a limitation period of thirtyGdays, which can be extended by a maximum of fifteen days on thedemonstration of sufficient cause for the delay. The determination of 19 Garikapati Veeraya v. Subbaiah Chaudhry, AIR 1957 SC 540; Ganga Bai v.Vijay Kumar, (1974) 2 SCC 393; Anant Mills Company Limited v. State of Gujarat,HAIR 1975 SC 1234

V NAGARAJAN v. SKS ISPAT AND POWER LTD.& ORS.[DR. DHANANJAYA Y CHANDRACHUD, J.]

the present appeal would hinge on two issues: (i) when will the clock forcalculating the limitation period run for appeals filed under the IBC; and(ii) is the annexing of a certified copy mandatory for an appeal to theNCLAT against an order passed under the IBC.

12. In B K Educational Services (supra) a two judge bench ofthis Court considered the interplay of the IBC, Limitation Act and theCompanies Act constituting the NCLT and held that the Limitation Actis applicable to proceedings under the IBC by virtue of Section 238-A ofthe IBC. In the context of the NCLT, Justice R F Nariman observed:

“12. The Report of the [Insolvency Law] Committee [Report,March 2018] would indicate that it has applied its mind to judgmentsof NCLT and NCLAT. It has also applied its mind to the aspectthat the law is a complete Code and the fact that the intention ofsuch a Code could not have been to give a new lease of life todebts which are time-barred.

21. Given the fact that the “procedure” that would apply to NCLTwould be the procedure contained inter alia in the Limitation Act,it is clear that NCLT would have to decide applications made to itunder the Code in the same manner as it exercises its otherjurisdiction under the Companies Act. This being the position inlaw, it is clear that when various provisions of the Companies Actwere amended by the Eleventh Schedule to the Code, it wasunnecessary to apply and adapt Section 433 of the CompaniesAct to the Code, as was done to various other sections of theCompanies Act.”

13. The NCLT was constituted under Section 408 of the CompaniesAct and replaced the erstwhile Company Law Boards. This referenceis also provided in the definition of an ‘Adjudicating Authority’ underSection 5(1) of the IBC. Chapter XXVII of the Companies Act detailsthe functioning of the newly established NCLT and NCLAT, includingthe procedural requirements governing their functioning. Section 433 ofthe Companies Act 2013 similarly invokes the provisions of the LimitationAct for proceedings before the NCLT and the NCLAT. The NCLTRules and NCLAT Rules have been framed in exercise of the CentralGovernment’s powers under Section 469 of the Companies Act to carryout its provisions. Section 420 deals with the orders of the NCLT andcreates a right to receive a copy to every party under Section 420(3):

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A“420. Orders of Tribunal.—(1) The Tribunal may, after giving theparties to any proceeding before it, a reasonable opportunity ofbeing heard, pass such orders thereon as it thinks fit.

(2) The Tribunal may, at any time within two years from the dateof the order, with a view to rectifying any mistake apparent fromBthe record, amend any order passed by it, and shall make suchamendment, if the mistake is brought to its notice by the parties:

Provided that no such amendment shall be made in respect of anyorder against which an appeal has been preferred under this Act.

(3) The Tribunal shall send a copy of every order passedCunder this section to all the parties concerned.”

Section 421(3) of the Companies Act prescribes the period oflimitation for filing an appeal to the NCLAT and specifies that theDcomputation shall be made from the date when a copy is “made availableto the person aggrieved”:

“421. Appeal from orders of Tribunal.—(1) Any person aggrievedby an order of the Tribunal may prefer an appeal to the AppellateTribunal.

E(2) No appeal shall lie to the Appellate Tribunal from an ordermade by the Tribunal with the consent of parties.

(3) Every appeal under sub-section (1) shall be filed withina period of forty-five days from the date on which a copy ofthe order of the Tribunal is made available to the personFaggrieved and shall be in such form, and accompanied bysuch fees, as may be prescribed…..”

Rule 50 of the NCLT Rules operationalises Section 421(3) of theCompanies Act by mandating the Registry of the NCLT to share a freeGcertified copy of the order to the parties:

“50. Registry to send certified copy.– The Registry shall send acertified copy of final order passed to the parties concerned freeof cost and the certified copies may be made available with costas per Schedule of fees, in all other cases.”

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14. In Sagufa Ahmed (supra) a three judge Bench of this Courtdealt with the interpretation of Section 421(3) of the Companies Act andwhether limitation would start running once a free certified copy is madeavailable to the party, sans an application from the aggrieved party. Itheld, in the context of a winding up petition under the Companies Act,that the aggrieved party could wait till it received its free copy underSection 420(3) of the Companies Act 2013 read with Rule 50 of theNCLT Rules, and was not obligated to file an application for a certifiedcopy for the purposes of the computation of limitation. Justice VRamasubramanian held:

“12. Therefore, it is true, as contended by the appellants, that theperiod of limitation of 45 days prescribed in Section 421(3) wouldstart running only from the date on which a copy of the order ofthe Tribunal is made available to the person aggrieved. It is alsotrue that under Section 420(3) of the Act read with Rule 50, theappellants were entitled to be furnished with a certified copy ofthe order free of cost.

13. Therefore if the appellants had chosen not to file a copyapplication, but to await the receipt of a free copy of theorder in terms of Section 420(3) read with Rule 50, theywould be perfectly justified in falling back on Section 421(3),for fixing the date from which limitation would startrunning…..”

However, the Court clarified that this would no longer apply oncean application for a certified copy is made and the order has beenreceived. Irrespective of when the free certified copy is received, thelimitation period would then be computed from the date of receipt of thecertified copy.

“13….. But the appellants in this case, chose to apply for a certifiedcopy after 27 days of the pronouncement of the order in theirpresence and they now fall back upon Section 421(3).

14. Despite the above factual position, we do not want to holdagainst the appellants, the fact that they waited from 25-10-2019(the date of the order [Sagufa Ahmed v. Upper Assam PlywoodProducts (P) Ltd., 2019 SCC OnLine NCLT 749] of NCLT) upto 21-11-2019, to make a copy application. But at least from 19- A

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A12-2019, the date on which a certified copy was admittedly receivedby the counsel for the appellants, the period of limitation cannotbe stopped from running. From 19-12-2019, the date on which thecounsel for the appellants received the copy of the order, theappellants had a period of 45 days to file an appeal. This periodexpired on 2-2-2020.”B

Therefore in a field which is not covered by a special law whichinvests the NCLT with jurisdiction, the general principle for thecomputation of limitation for filing an appeal against an order of theNCLT is governed by the statutory mandate of Section 420(3) of theCompanies Act read with Rule 50 of the NCLT Rules, which enables aCparty to compute limitation from the date of receipt of the statutorilymandated free certified copy, without having to file its own application.However, the decision of this Court in Sagufa Ahmed (surpa) clarifiesthat the statutory mandate of a free copy is not to enable litigants to taketwo bites at the apple where they could compute limitation from eitherDwhen the certified copy is received on the litigant’s application or receivedas a free copy from the registry - whichever is later.

15. The IBC is a complete code in itself and over-rides anyinconsistencies that may arise in the application of other laws. Section 61of the IBC, begins with a non-obstante provision - “notwithstanding anythingEto the contrary contained under the Companies Act, 2013” when prescribingthe right of an aggrieved party to file an appeal before the NCLAT alongwithin the stipulated period of limitation. The notable difference betweenSection 421(3) of the Companies Act and Section 61(2) of the IBC is inthe absence of the words “from the date on which a copy of the orderof the Tribunal is made available to the person aggrieved” in theFlatter. The absence of these words cannot be construed as a mere omissionwhich can be supplemented with a right to a free copy under Section420(3) of the Companies Act read with Rule 50 of the NCLT Rules forthe purposes of reckoning limitation. This would ignore the context of theIBC’s provisions and the purpose of the legislation.G16. The law on limitation with respect to the IBC is settled andemphatic in its denunciation of delays[20]. The power to condone delay istightly circumscribed and conditional upon showing sufficient cause, even 20 Essar Steel (supra), paras 119-123, 127; Innoventive Industries Ltd v. ICICIBank, (2018) 1 SCC 407, para 13; Gujarat Urja Vikas Nigam Ltd v. Amit Gupta,H(2021) SCC OnLine 194, para 71

within the period of delay which is capable of being condoned. The IBCis a watershed legislation which seeks to overhaul the previous bankruptcyregime which was afflicted by delays and indefinite legal proceedings.The IBC sought to structure and streamline the entire process ofinsolvency, right from the initiation of insolvency to liquidation, as a one-stop mechanism. Section 12(3) of the IBC prescribes a strict time-linefor the completion of the corporate insolvency resolution process of onehundred and eighty days which is extendable by ninety days. The provisoto Section 12(3) imposes an outer-limit of three hundred and thirty days,including time taken in legal proceedings. While a three-judge bench ofthis Court in Essar Steel India Ltd v. Satish Kumar Gupta[21] heldsuch a time-limit on court proceedings as violative of Article 14, only theword ‘mandatorily’ was struck down and a narrowly defined extensionto the outer-limit was allowed in exceptional circumstances if the processis at a near conclusion and serves the ends of the IBC. Regulation 40Aof the Insolvency and Bankruptcy Board of India (Insolvency ResolutionProcess for Corporate Persons) Regulations, 2016 provides for a detailedmodel timeline for the corporate insolvency resolution process, includingextensions that are granted as discretionary powers under the proceduraleventualities of the IBC framework. The Resolution Professional isresponsible for ensuring the timeliness of the process and has to fileseveral forms, as detailed under Regulation 40B, and explain all delaysthat occur in the intervening period, when filing the final Form H[22] uponsubmitting a successful resolution plan under Section 30 of the IBC.Notably, Section 64[23] of the IBC imposes an obligation on the NCLTand NCLAT to expeditiously dispose applications pending before it, along 21 (2020) 8 SCC 531

22 Regulation 39(4)(b), Insolvency and Bankruptcy Board of India (Insolvency ResolutionProcess for Corporate Persons) Regulations, 2016

23 “64. Expeditious disposal of applications.—(1) Where an application is not disposedof or an order is not passed within the period specified in this Code, the NationalCompany Law Tribunal or the National Company Law Appellate Tribunal, as the casemay be, shall record the reasons for not doing so within the period so specified; and thePresident of the National Company Law Tribunal or the Chairperson of the NationalCompany Law Appellate Tribunal, as the case may be, may, after taking into accountthe reasons so recorded, extend the period specified in the Act but not exceeding tendays.

(2) No injunction shall be granted by any court, tribunal or authority in respect of anyaction taken, or to be taken, in pursuance of any power conferred on the NationalCompany Law Tribunal or the National Company Law Appellate Tribunal under thisCode.”

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Awith recording of reasons for any delay from the prescribed limit to thePresident of the NCLT/NCLAT, who can then extend the period, notexceeding ten days. The decision in Mobilox Innovations (supra),took note of this provision and stressed on the importance of timelines inthe following terms:

B“35. Another thing of importance is the timelines within which theinsolvency resolution process is to be triggered. The corporatedebtor is given 10 days from the date of receipt of demand noticeor copy of invoice to either point out that a dispute exists betweenthe parties or that he has since repaid the unpaid operational debt.If neither exists, then an application once filed has to be disposedCof by the adjudicating authority within 14 days of its receipt, eitherby admitting it or rejecting it. An appeal can then be filed to theAppellate Tribunal under Section 61 of the Act within 30 days ofthe order of the adjudicating authority with an extension of 15further days and no more.

D36. Section 64 of the Code mandates that where these timelinesare not adhered to, either by the Tribunal or by the AppellateTribunal, they shall record reasons for not doing so within theperiod so specified and extend the period so specified for anotherperiod not exceeding 10 days. Even in appeals to the SupremeECourt from the Appellate Tribunal under Section 62, 45 days’ timeis given from the date of receipt of the order of the AppellateTribunal in which an appeal to the Supreme Court is to be made,with a further grace period not exceeding 15 days. The strictadherence of these timelines is of essence to both the triggeringprocess and the insolvency resolution process. As we have seen,Fone of the principal reasons why the Code was enacted wasbecause liquidation proceedings went on interminably, therebydamaging the interests of all stakeholders, except a recalcitrantmanagement which would continue to hold on to the companywithout paying its debts. Both the Tribunal and the AppellateGTribunal will do well to keep in mind this principal objective soughtto be achieved by the Code and will strictly adhere to the time-frame within which they are to decide matters under the Code.”

Recently, a two judge Bench of this Court in Ebix Singapore(supra) interpreted the legislative background of the IBC, its provisionsHand subsequent reports from Parliamentary committees to stress on the

predictability and timeliness that is woven into the design of the IBC.Speaking through one of us (Justice D Y Chandrachud), the Courtobserved:

“96 The BLRC report noted that the insolvency regime was duefor a major overhaul as the recovery rates in India were amongthe lowest in the world58 and a revamped, coherent code wasenvisaged with speed and predictability woven into its underlyingdesign to ensure higher recovery rates and immediate liquidation,in the event of a failed resolution. As noted by this Court in EssarSteel (supra), the insolvency regime in India was overhauled afterthe provisions of SICA, SARFAESI and Recovery of Debts Act,in spite of providing for expeditious determination, were used bydefaulting companies to enjoy extended moratorium periods andfailure to enforce timelines meant legal proceedings would dragon for years and not result in recovery of stressed assets……..In identifying the sources of delay, adjudicating mechanisms wereidentified as one of the two important sources of delay whichneed to be equipped with the right resources. In order to respondto the rapid changes in the economy, the BLRC reportrecommended the formation of an IBBI which would function asa regulator and formulate regulations that dynamically detail theprocedural norms of the working of the IBC with the necessaryimmediacy. It is also important for this Court, as a constitutionalauthority which determines questions of law concerning the IBCframework, to note that a rapid liquidation may sometimes bepreferable to a protracted CIRP.”

17. In this background, when timelines are placed even on legalproceedings, reading in the requirement of an “order being madeavailable” under a general enactment (Companies Act) would do violenceto the special provisions enacted under the IBC where timing is criticalfor the workability of the mechanism, health of the economy, recoveryrate of lenders and valuation of the corporate debtor. The IBC, as aprescriptive mechanism, affecting rights of stakeholders who are notnecessarily parties to the proceedings, mandates diligence on the part ofapplicants who are aggrieved by the outcome of their litigation. An appeal,if considered necessary and expedient by an aggrieved party, is expectedto be filed forthwith without awaiting a free copy which may be receivedat an indefinite stage. Hence, the omission of the words “from the date A

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Aon which the order is made available” for the purposes of computationof limitation in Section 61(2) of the IBC, is a consistent signal of theintention of the legislature to nudge the parties to be proactive andfacilitate timely resolution.

18. On the question of a certified copy for filing an appeal againstBan order passed by the NCLT under the IBC, Rule 22(2) of the NCLATRules mandates that an appeal has to be filed with a certified copy ofthe ‘impugned order’:

“22. Presentation of appeal.– (1) Every appeal shall be presentedin Form NCLAT-1 in triplicate by the appellant or petitioner orCapplicant or respondent, as the case may be, in person or by hisduly authorised representative duly appointed in this behalf in theprescribed form with stipulated fee at the filing counter and non-compliance of this may constitute a valid ground to refuse toentertain the same.

D(2) Every appeal shall be accompanied by a certified copyof the impugned order…..”

Therefore, it cannot be said that the parties can automaticallydispense with their obligation to apply for and obtain a certified copy forEfiling an appeal. Any delay in receipt of a certified copy, once anapplication has been filed, have been envisaged by the legislature andduly excluded to not cause any prejudice to a litigant’s right to appeal.

19. Section 12 of the Limitation Act provides guidance onreckoning the period of limitation and excludes the time taken by a partyFfor obtaining a certified copy of the order it seeks to appeal. However,the explanation clarifies that the time taken by the court in preparing theorder before an application for a copy is filed by the aggrieved party, isnot excluded from the computation of limitation:

“12. Exclusion of time in legal proceedings.—(1) In computingGthe period of limitation for any suit, appeal or application, the dayfrom which such period is to be reckoned, shall be excluded.

(2) In computing the period of limitation for an appeal or anapplication for leave to appeal or for revision or for reviewof a judgment, the day on which the judgment complainedHof was pronounced and the time requisite for obtaining a copy of the decree, sentence or order appealed from orsought to be revised or reviewed shall be excluded.

(3) Where a decree or order is appealed from or sought to berevised or reviewed, or where an application is made for leave toappeal from a decree or order, the time requisite for obtaining acopy of the judgment 3[* * *] shall also be excluded.

(4) In computing the period of limitation for an application to setaside an award, the time requisite for obtaining a copy of theaward shall be excluded.

Explanation.—In computing under this section the timerequisite for obtaining a copy of a decree or an order, anytime taken by the court to prepare the decree or orderbefore an application for a copy thereof is made shall notbe excluded.”

The import of Section 12 of the Limitation Act and its explanationis to assign the responsibility of applying for a certified copy of the orderon a party. A person wishing to file an appeal is expected to file anapplication for a certified copy before the expiry of the limitation period,upon which the “time requisite” for obtaining a copy is to be excluded.However, the time taken by the court to prepare the decree or orderbefore an application for a copy is made cannot be excluded. If noapplication for a certified copy has been made, no exclusion can ensue.In fact, the explanation to the provision is a clear indicator of the legalposition that the time which is taken by the court to prepare the decreeor order cannot be excluded before the application to obtain a copy ismade. It cannot be said that the right to receive a free copy under Section420(3) of the Companies Act obviated the obligation on the appellant toseek a certified copy through an application. The appellant has urgedthat Rule 14[24] of the NCLAT Rules empowers the NCLAT to exemptparties from compliance with the requirement of any of the rules in theinterests of substantial justice, which has been typically exercised infavour of allowing a downloaded copy in lieu of a certified copy. While 24 “14. Power to exempt.– The Appellate Tribunal may on sufficient cause being shown,exempt the parties from compliance with any requirement of these rules and may givesuch directions in matters of practice and procedure, as it may consider just andexpedient on the application moved in this behalf to render substantial justice.”

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Ait may well be true that waivers on filing an appeal with a certified copyare often granted for the purposes of judicial determination, they do notconfer an automatic right on an applicant to dispense with complianceand render Rule 22(2) of the NCLAT Rules nugatory. The act of filingan application for a certified copy is not just a technical requirement forcomputation of limitation but also an indication of the diligence of theBaggrieved party in pursuing the litigation in a timely fashion. In a similarfactual scenario, the NCLAT had dismissed an appeal[25] as time-barredunder Section 61(2) of the IBC since the appellant therein was presentin court, and yet chose to file for a certified copy after five months of thepronouncement of the order.C20. The appellant had argued that the order of the NCLAT notesthat the NCLT registry had objected to the appeal in regard to limitation,to which the appellant had filed a reply stating that the limitation periodwould begin from the date of the uploading of the order, which was 12March 2020. The appellant submitted that the suo motu order of thisDCourt dated 23 March 2020, taking retrospective effect from 15 March2020, made under Article 142 of the Constitution, extended the limitationuntil further orders, which renders the appeal filed on 8 June 2020 withinlimitation. However it is important to note that this Court had only extendedthe period of limitation applicable in the proceedings, only in cases wheresuch period had not ended before 15 March 2020. In this case, owing toEthe specific language of Section 61(1) and 61(2), it is evident that limitationcommenced once the order was pronounced and the time taken by theCourt to provide the appellant with a certified copy would have beenexcluded, as clarified in Section 12(2) of the Limitation Act, if theappellant had applied for a certified copy within the prescribed period ofFlimitation under Section 61(2) of the IBC. The construction of the lawdoes not import the absurdity the appellant alleges of an impossible actof filing an appeal against an order which was uploaded on 12 March2020. However, the mandate of the law is to impose an obligation on theappellant to apply for a certified copy once the order was pronouncedby the NCLT on 31 December 2019, by virtue of Section 61(2) of theGIBC read with Rule 22(2) of the NCLAT Rules. In the event the appellantwas correct in his assertion that a correct copy of the order was notavailable until 20 March 2020, the appellant would not have received a 25 Prowess International Pvt Ltd v. Action Ispat & Power Pvt Ltd, Company AppealH(AT) (Insolvency) 223 of 2017 (NCLAT, 26 March 2018)

certified copy in spite of the application till such date and accordinglyreceived the benefit of the suo motu order of this Court which cameinto effect on 15 March 2020. However, in the absence of an applicationfor a certified copy, the appeal was barred by limitation much prior tothe suo motu direction of this court, even after factoring in a permissiblefifteen days of condonation under Section 61(2). The Court is notempowered to condone delays beyond statutory prescriptions in specialstatutes containing a provision for limitation[26].

D Conclusion

D Conclusion

21. The answer to the two issues set out in Section C of thejudgement- (i) when will the clock for calculating the limitation periodrun for proceedings under the IBC; and (ii) is the annexation of a certifiedcopy mandatory for an appeal to the NCLAT against an order passedunder the IBC – must be based on a harmonious interpretation of theapplicable legal regime, given that the IBC is a Code in itself and hasoverriding effect. Sections 61(1) and (2) of the IBC consciously omitthe requirement of limitation being computed from when the “order ismade available to the aggrieved party”, in contradistinction to Section421(3) of the Companies Act. Owing to the special nature of the IBC,the aggrieved party is expected to exercise due diligence and apply for acertified copy upon pronouncement of the order it seeks to assail, inconsonance with the requirements of Rule 22(2) of the NCLAT Rules.Section 12(2) of the Limitation Act allows for an exclusion of the timerequisite for obtaining a copy of the decree or order appealed against. Itis not open to a person aggrieved by an order under the IBC to await thereceipt of a free certified copy under Section 420(3) of the CompaniesAct 2013 read with Rule 50 of the NCLT and prevent limitation fromrunning. Accepting such a construction will upset the timely frameworkof the IBC. The litigant has to file its appeal within thirty days, whichcan be extended up to a period of fifteen days, and no more, upon showingsufficient cause. A sleight of interpretation of procedural rules cannot beused to defeat the substantive objective of a legislation that has an impacton the economic health of a nation.

26 Union of India v. Popular Construction Co., (2001) 8 SCC 470; Singh Enterprisesv. Commissioner of Central Excise, Jamshedpur, (2008) 3 SCC 70; ChhattisgarhState Electricity Board v. Central Electricity Regulatory Commission, (2010) 5SCC 23; Bengal Chemists and Druggists Association v. Kalyan Chowdhury, (2018)3 SCC 41

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A22. On the second question, Rule 22(2) of the NCLAT Rulesmandates the certified copy being annexed to an appeal, which continuesto bind litigants under the IBC. While it is true that the tribunals, andeven this Court, may choose to exempt parties from compliance withthis procedural requirement in the interest of substantial justice, as re-iterated in Rule 14 of the NCLAT Rules, the discretionary waiver doesBnot act as an automatic exception where litigants make no efforts topursue a timely resolution of their grievance. The appellant having failedto apply for a certified copy, rendered the appeal filed before the NCLATas clearly barred by limitation.

23. The appellant was present before the NCLT on 31 DecemberC2019 when interim relief was denied and the miscellaneous applicationwas dismissed. The appellant has demonstrated no effort on his part tosecure a certified copy of the said order and has relied on the date of theuploading of the order (12 March 2020) on the website. The period oflimitation for filing an appeal under Section 61(1) against the order of theDNCLT dated 31 December 2019, expired on 30 January 2020 in view ofthe thirty-day period prescribed under Section 61(2). Any scope for acondonation of delay expired on 14 February 2020, in view of the outerlimit of fifteen days prescribed under the proviso to Section 61(2). Thelockdown from 23 March 2020 on account of the COVID-19 pandemicand the suo motu order of this Court has had no impact on the rights ofEthe appellant to institute an appeal in this proceeding and the NCLAThas correctly dismissed the appeal on limitation. Accordingly, the presentappeal under Section 62 of the IBC stands dismissed.

24. Pending application(s) if any, stand disposed of. No order asto costs.

F

Divya Pandey

Appeal dismissed.

G

H