30 DAYS LIMITATION PERIOD TO FILE APPEAL U/S 61 OF IBC BEGINS FROM THE DATE OF PRONOUNCEMENT OF THE ORDER IN THE COURT - SC

The Supreme Court ruled that the thirty-day limitation period prescribed by Section 61(2) of the Insolvency and Bankruptcy Code (the act) to file an appeal against the decision of the National Company Law Tribunal begins from the date of pronouncement of the order in the Court and not from the date of the order being uploaded. 

The Court said that sections 61(1) & (2) of the IBC omits the requirement of limitation being computed from when the ‘order is made available to the parties. Whereas section 421(3) of the Companies Act allows the period to begin from the date when a copy is made available.

The aggrieved party under IBC is expected to apply for a certified copy upon pronouncement of the order. Thus, a party’s failure to apply to receive a certified copy of the order immediately after pronouncement denies him the right to extend the limitation period. However, the Court explained that the period between the application for issuing a certified copy and the date of its receipt can be condoned. But the time between pronouncement of judgment and filing of application remains material to calculation of the limitation period.

 On June 8, 2020, the appellant filed an appeal before the NCLAT without attaching the certified copy of the order of NCLT. It was observed that by the time an application for the certified copy was made, the limitation period for filing the appeal (February 14, 2020) was over. NCLAT dismissed the appeal, reasoning it was barred by limitation.

In the appeal before the bench of Justice DY Chandrachud, Vikram Nath, and BV Nagarathna, the appellant argued that the period of the limitation would start running from the date of a free copy of the order is provided.  The Court, however, negated the argument and concluded that the appellant’s lack of diligence stripped him of his right to file an appeal.

Author: Papiha Ghoshal