Procedural Challenges Impacting Limitation: A Guide To Appealing Orders Under Section 61 Of The IBC

Introduction

In recent times the Supreme Court and the NCLT have made certain pronouncements relating to the filing of appeals with certified copies and the governing limitation period. Concerning the procedural aspect of the Company Law and the Insolvency and Bankruptcy Code (“Code”), it is mandatory to attach a certified copy while filing an appeal against the impugned order of the tribunal. The certified copy of the impugned order is required to be filed with an appeal under Section 61 of the Code to ensure the appellant's awareness of the contents of the impugned order and his competency to challenge the order efficiently¹. The certified copy is the veritable document that ensures the reliability and accurate representation of the original document before the courts and tribunals The act of filing an application for a certified copy is not just a technical requirement for computation of limitation but also an indication of the diligence of the aggrieved party in pursuing a litigation in a timely fashion.² Subsequently, this paper will underscore the limitation of applying a certified copy before the tribunals during the filing of an appeal.

Provisions Vis-à-vis Certified Copy

In the light of an appeal under Section 61 of the Code, the prescribed limit for filing an appeal is 30 days which can be extended to 15 more days if the court is satisfied that there are sufficient causes for not filing an appeal in the prescribed period. According to Rule 22(2) of the NCLAT Rules, 2016, an appeal must be accompanied by a certified copy of the impugned order.³ With the effect of Section 238A of the Code, the provisions of the Limitation Act 1963 shall apply to the proceedings and appeals before the Adjudication Authority. Therefore, the Adjudication Authority under Section 12(2) of the Limitation Act can allow for an exclusion of the time requisite for obtaining a certified copy of the impugned order.⁴

Judicial Pronouncements

In light of the certified copies filed with an appeal, many courts and tribunals have given their orders. In the Judgement of V. Nagarajan Vs. Ispat and Power Ltd., the Supreme Court decided that if the appellant wants to take the benefit of the exclusion of time by obtaining the certified copy from the tribunal then he must apply for the same certified copy within the limitation period prescribed under Section 61 of the Code.⁵ This emphasises that applicants must be vigilant about the court timelines and further, showcases the intention of the aggrieved party to use the remedy effectively and efficiently. Moreover, the court pointed out that as per the provisions of the Companies Act, 2013 under Section 420 (3) read with Rule 50 of NCLT Rules the Applicants can't sit for the free certified copies and prevent limitation from running.⁶ The same was held in the case of Gaurav Agarwal Vs. C.A Devang P. Sampat where the court decided that the appellant can't get exclusion under 12(2) of the Limitation Act, 1963 if the applicant failed to apply for a certified copy within the limitation period of 30 days.⁷ The court also emphasised the starting of the limitation period from the very day of an order delivered by the tribunal.

In the Jindal Power Limited, the same was held that “the benefit of the requisite for filing certified copy can only be claimed if the application of certified copy is filed before the expiry of limitation period” Thus, in this case, the appellant tried to take the advantage of section 12 (2) of the limitation act.⁸

In the NCLT order of Nipan Bansal Vs. Employees Provident Fund Organization, the tribunal held that when the application for the certified copy is filed beyond the period of limitation, the applicant is not entitled to exclude time of the preparation of the certified copy from the Limitation period.⁹

In the recent judgement Chaderpati Vs. Sony Realtors, the NCLT Delhi Bench, sumps up the reasoning of different cases related to the limitation period for Certified copy and the exclusion of time for obtaining the certified copy. The tribunal in this case brought down different appeals together and gave their decision by giving nine points on limitation under section 61 of the Code¹⁰. The nine points of limitation are mentioned below: -

1. The period of limitation is to be reckoned from the date of pronouncement of the order in the cases covered by the Code.
2. It is mandatory to annex the certified copy of the impugned order with the memorandum of appeal. 
3. The Tribunal may exempt the parties from compliance with the procedural requirement in the interest of substantial justice as reiterated in Rule 14. 
4. There is no automatic exemption where the litigants make no efforts to pursue a timely resolution of their grievance. 
5. The Appellant having failed to apply for a certified copy, rendered the appeal filed before the NCLAT as barred by limitation. 
6. It is not open to the person aggrieved under the Code to await the receipt of a free certified copy under Section 420(3) of the Act r/w Rule 50 and prevent limitation from running.
7. The litigant has to file the appeal within 30 days which can be extended up to 15 days on showing sufficient cause which cannot be condoned thereafter.
8. Limitation cease to run from the date of e-filing.
9. To take advantage of Section 12(2) of the Act 1963, the certified copy has to be applied during the currency of the period prescribed for filing an appeal.

Conclusion

Statutory procedures are crucial for the smooth functioning of the courts and tribunals. “A sleight of interpretation of Statutory procedures should not be used to defeat the substantive objective of a legislation that has an impact on the economic health of a nation.”

In the light of Section 61 of the Code, the appellant has prescribed a period of limitation for filing the appeal but the appellant's excuses and interference with the provisions of the Act hampers the resolution process of the Code. In the recent judgement of the NCLT Delhi in Chaderpati vs. Sony Realtors, the court cleared up the way that the aggrieved parties must be vigilant and should not use the statutory procedures of limitation in a wrong way. At the same time, the Courts and Tribunals must also not apply the procedures so harshly on the parties that it will impact the parties who genuinely failed to comply with the provisions of the Code. The courts and tribunals must go into the intricacies of the case and give exclusion to the aggrieved party without strictly applying the provisions.

Footnotes

1. Section 61(2), Insolvency and Bankruptcy Code, 2016

2. V Nagarajan vs SKS Ispat and Power Ltd LL 2021 SC 581

3. Rule 22(2), NCLT Rules, 2016

4. Section 12(2), Limitation act,1963

5. V Nagarajan vs SKS Ispat and Power Ltd LL 2021 SC 581

6. Section 420(3), Companies Act,2013; Rule 50, NCLT Rules, 2016

7. Section 12(2), Limitation act,1963

8. Jindal Power Limited. Vs. Dushyan C. Dave, Liquidator of Shirpur Power Pvt. Ltd. & Ors. Company Appeal (AT) (Ins) No. 11 of 2023

9 .Company Appeal (AT) (Insolvency) No. 1454 of 2023

10. Chaderpati vs Sony Realtors, Company Appeal (AT) (Insolvency) No. 691 of 2023

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