NCLAT Cannot Condone Delay In Filing Appeal Beyond 15 Days Introduction

Recently, the Supreme Court vide its Order dated 7 May 2025 passed in the case of Tata Steel Ltd. v. Raj Kumar Banerjee and Ors. in C.A. No. 408 of 2023, while allowing the appeal, reiterated that the NCLAT cannot condone any delay in filing an appeal beyond the period of 15 days as stipulated under the statute.

Facts

In the present case, the appellant was the successful resolution applicant. Appellant had challenged the Impugned Order, whereby the NCLAT allowed the application for condonation of delay in filing the appeal under Section 61 of the IBC by Respondent No. 1, an erstwhile shareholder of the Corporate Debtor ('R1').

R1 had preferred an appeal against the order dated 7 April 2022, passed by the NCLT, approving the resolution plan of the Appellant. R1 e-filed the appeal along with an application for condonation of delay before the NCLAT on 23 May 2022 and physically filed it on 24 May 2022.

Order of the NCLAT

The NCLAT allowed the application for condonation of delay on the ground that NCLT had approved the resolution plan on 7 April 2022; the intimation of the said approval was given to the listing departments of the BSE and NSE only on 8 April 2022; and R1 became aware of the approval on that date, as he was not a party to the litigation before NCLT. Accordingly, the 30-day limitation period for filing the appeal commenced on 8 April 2022 and was set to expire on 8 May 2022. However, since 8 May 2022 was a Sunday, by virtue of Section 4 of the Limitation Act, 1963, the prescribed period was extended to the next working day i.e., 9 May 2022. Thereafter, R1 would be entitled to a grace period of 15 days, which expired on 24 May 2022. Hence, it was held by the NCLAT that the appeal was not barred by limitation.

Judgement

The Supreme Court allowed the appeal and held that the limitation period for filing the appeal commenced on 7 April 2022 and expired on 7 May 2022. Thus, the appeal filed before the NCLAT was not within limitation. While holding so, the Court relied upon the case of Kalpraj Dharamshi v. Kotak Investment Advisors Limited & Another, [(2021) 10 SCC 401] and reiterated that the NCLAT cannot condone any delay in filing of the appeal beyond the grace period of 15 days stipulated under the statute.

Further, it relied on Section 238A of IBC which makes the Limitation Act applicable on IBC proceedings and calculated whether the Appeal filed by R1 before the NCLAT was within the limitation period or not. While doing so, the Court considered Section 4 of the Limitation Act and Rule 3 of NCLAT Rules, 2016 which extend the limitation period to the next working day, if the prescribed period of limitation expires on a holiday. After considering various past decisions which clarified the scope and applicability of Section 4, the Court held that the benefit of exclusion of period during which the court is closed shall be available when the application is filed within 'prescribed period of limitation' and shall not be available in respect of period extendable by court in exercise of its discretion. Further, the argument about R1 becoming aware of the order only on the next date, when the same was published by NSE / BSE was negatived on merits. Thus, it was held that the limitation period for filing the appeal commenced on 7 April 2022 and expired on 7 May 2022. Whereas, the grace period of 15 days expired on 22 May 2022.

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