NCLAT Cannot Condone Delay Beyond Statutory 15 Days Under Section 61(2) IBC

A bench of Justices J.B. Pardiwala and R. Mahadevan heard Tata Steel Ltd.'s challenge to the National Company Law Appellate Tribunal's order allowing condonation of delay in an appeal under Section 61(2) of the Insolvency and Bankruptcy Code, 2016. The appeal concerned whether a minority shareholder’s challenge to approval of a resolution plan was time‑barred and whether the NCLAT had power to condone delay beyond the 15‑day limit in the proviso to Section 61(2).

The Court allowed Tata Steel’s appeal and set aside the NCLAT order of 14.12.2022 that had condoned delay. The decision held that the limitation regime under Section 61(2) IBC permits a maximum of 45 days (30 days plus an extendable 15 days) for filing an appeal and that the appellate tribunal could not exceed the statutorily prescribed condonation period. The Court, in its reasoning, observed: “The proviso to Section 61(2) clearly limits the NCLAT’s jurisdiction to condone delay only up to 15 days beyond the initial 30‑day period. Where a statute expressly limits the period within which delay may be condoned, an Appellate Tribunal cannot exceed that limit. In other words, the NCLAT being a creature of statute, operates strictly within the powers conferred upon it. Unlike a civil suit, it lacks inherent jurisdiction to extend time on equitable grounds.” The Court also noted that “time is of the essence in statutory appeals, and the prescribed limitation period must be strictly adhered to,” emphasising that allowing condonation beyond the statutory cap would frustrate the Code’s objective of speedy resolution.

Background The appellant, Tata Steel Ltd., was the successful resolution applicant for Rohit Ferro‑Tech Limited, with its resolution plan approved by the Committee of Creditors and the NCLT, Kolkata, on 07.04.2022. Respondent No.1, an erstwhile minority shareholder, filed an appeal under Section 61 IBC to set aside the NCLT order and sought condonation of a 15‑day delay. The NCLAT allowed the condonation application, computing limitation to expire on 24.05.2022; Tata Steel challenged that order before the Supreme Court.

Respondent No.1 contended that the limitation period commenced only when the resolution plan approval was disclosed to stock exchanges on 08.04.2022 and that Section 4 of the Limitation Act extended the deadline because 08.05.2022 fell on a Sunday. The appellant countered with records showing immediate intimation to BSE and NSE on 07.04.2022, and relied on precedents — including V. Nagarajan — holding that limitation under Section 61(2) runs from the date of pronouncement and that the time taken to obtain certified copies may be excluded under Section 12(2) Limitation Act only if an application for copy is made in time. As this Court observed, “IBC is a complete code in itself and overrides any inconsistencies that may arise in the application of other laws.” Applying settled authorities on computation of limitation and the limited scope for condonation, the Court concluded that Respondent No.1 filed the appeal beyond the maximum statutory period of 45 days and that NCLAT lacked jurisdiction to extend time further. The Supreme Court allowed the appeal, set aside the NCLAT order dated 14.12.2022 in I.A. No.1667 of 2022 in CA (AT) (Insolvency) No.615 of 2022, and did not make any order as to costs. No interim directions or further liberties were granted.

Case Details: Case No.: Civil Appeal No. 408 of 2023 Case Title: Tata Steel Ltd. v. Raj Kumar Banerjee & Ors. Appearances: For the Petitioner(s): [Not indicated in the judgment] For the Respondent(s): [Not indicated in the judgment]