NCLAT affirmed that appeals under the Insolvency and Bankruptcy Code had to adhere to a strict 45-day limitation, dismissing claims of lack of knowledge as insufficient grounds for delay.
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench led by Justice Rakesh Kumar Jain (Judicial Member) and Indevar Pandey (Technical Member) reviewed an appeal and observed that the limitation period for filing an appeal under the Insolvency and Bankruptcy Code is strictly calculated from the date of the Adjudicating Authority's order, and any delay beyond the permissible 45 days cannot be condoned, regardless of claims of ignorance or delayed knowledge. The Appellate Tribunal emphasized that deemed knowledge from public announcements precludes an appellant from arguing unawareness of proceedings.
This appeal was directed against the order dated 11.03.2024, issued by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench), which admitted a company petition filed by Canara Bank under Section 7 of the Insolvency and Bankruptcy Code for initiating Corporate Insolvency Resolution Process (CIRP) against M/s Vas Infrastructure Ltd. The petition arose due to the Corporate Debtor's default on an amount exceeding ₹301 crores, leading to the appointment of Ashok Kumar Golechha as the Interim Resolution Professional. The Appellant, a society claiming ownership of the mortgaged land where residential flats were constructed, subsequently filed the appeal under Section 61 of the Code, alleging that the Corporate Debtor's actions affected its interests.
In conjunction with the appeal, the Appellant sought condonation of a 51-day delay in filing, asserting that it only became aware of the CIRP order on 10.05.2024 when Form G was published. The appeal was filed on 31.05.2024. The Appellant contended that if the limitation period began from 10.05.2024, the appeal was timely, but if calculated from 11.03.2024, it was delayed. Counsel for the Appellant cited a prior case to support the claim for condonation, arguing that the order was not communicated to them. In contrast, the Respondent's counsel argued that limitation under the Code runs from the date of the order's pronouncement, asserting that the Appellant, being an intervenor in the Tribunal proceedings, should have been aware of the order and the subsequent public announcement regarding the CIRP.
The NCLAT carefully considered the arguments presented by both parties. It noted that the Code stipulates a strict limitation period for appeals, with a total window of 45 days comprising an initial 30 days plus an additional 15 days under certain conditions. The court highlighted that the Appellant's delay far exceeded this period, rendering the appeal time-barred. Furthermore, it referenced the Supreme Court's ruling that public announcements regarding the CIRP constituted deemed knowledge, reinforcing that the Appellant could not claim ignorance despite having filed an intervention application.
Ultimately, the NCLAT dismissed the application for condonation of delay, concluding that it lacked merit and was barred by time. As a result, the main appeal was also dismissed due to improper constitution, reaffirming the binding nature of statutory timelines under the Insolvency and Bankruptcy Code.
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