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NCLAT cannot condone a delay of more than 15 days in an appeal against an NCLT decision: Supreme Court

Team SoOLEGAL 15 Sep 2021 3:20pm

NCLAT cannot condone a delay of more than 15 days in an appeal against an NCLT decision: Supreme Court

On September 14, 2021, the Supreme Court ruled that, under Section 61(2) of the Insolvency and Bankruptcy Code (IBC), the National Company Law Appellate Tribunal (NCLAT) cannot condone a delay of more than 15 days in an appeal filed against a decision of the National Company Law Tribunal (NCLT).

A division bench comprising of MR Shah, as well as Aniruddha Bose, ruled that the NCLAT can only excuse a delay of up to 15 days, as specified in the proviso to Section 61(2) of the IBC. “Considering the statutory provisions that specify that a delay of more than 15 days in filing an appeal is uncondonable, the same cannot be condoned even in the exercise of powers under Article 142 of the Constitution,” the Court said.

As a result, the Court dismissed an appeal filed by National Spot Exchange Limited (NSEL) against an order of the NCLAT, which declined to condone a 44-day delay in filing an appeal against an NCLT order.

Every appeal from the NCLT to the NCLAT must be filed within 30 days, according to Section 61(2) of the Insolvency and Bankruptcy Code.

The proviso to Section 61(2) of the Insolvency and Bankruptcy Code, on the other hand, allows NCLAT to condone a 15-day delay over 30 days if it believes there was sufficient justification for not filing the appeal within the 30-day limitation period.

Thus, if the NCLAT is to condone the delay, an appeal must be filed within 45 days from the date of the NCLT ruling.

NSEL, on the other hand, filed the appeal 44 days after the deadline of 45 days.

Since the NCLAT can only condone delays of up to 15 days, it declined to condone delays of more than 15 days from completion of 30 days, i.e., in the given scenario, a delay of 44 days, and thus dismissed the appeal.

NSEL argued before the Supreme Court that, while the NCLAT may have been justified in dismissing the appeal on the grounds of limitation by holding that it lacks jurisdiction to excuse the delay beyond 15 days, the Supreme Court may exercise its powers under Article 142 of the Indian Constitution in the peculiar facts as well as circumstances of the case because the stakes are high.

The Supreme Court, on the other hand, declined to accept the same, holding that what cannot be done directly due to legislative provisions cannot be done indirectly when exercising powers under Article 142 of the Indian Constitution.

Therefore, while dismissing the plea the court observed that “there was a delay of 44 days in preferring the appeal which was beyond the period of 15 days which maximum could have been condoned and in view of specific statutory provision contained in Section 61(2) of the IB Code, it cannot be said that the NCLAT has committed any error in dismissing the appeal on the ground of limitation by observing that it has no jurisdiction and/or power to condone the delay exceeding 15 days”.


Tagged: NCLAT   Supreme Court   Insolvency and Bankruptcy Code   MR Shah   Aniruddha Bose   Article 142   indian constitution   National Spot Exchange Limited  
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