Supreme Court Reaffirms: NCLAT Cannot Condonate Delay Beyond 45 Days Under Section 61(2) of the IBC
- REEDLAW
- 2 days ago
- 3 min read
The Supreme Court reaffirmed that the NCLAT cannot condone any delay beyond 45 days under Section 61(2) of the Insolvency and Bankruptcy Code (IBC).
On 07-05-2025, the Supreme Court Bench of Justice J.B. Pardiwala and Justice R. Mahadevan reviewed an appeal and held that the National Company Law Appellate Tribunal (NCLAT) has no jurisdiction to condone any delay in filing an appeal under Section 61(2) of the Insolvency and Bankruptcy Code, 2016, beyond the maximum statutory limit of 45 days (30 days plus a condonable 15 days). The Court emphasised that this timeline must be strictly adhered to, without any scope for equitable or discretionary extension.
In this case, the Supreme Court examined the legality of an order passed by the National Company Law Appellate Tribunal (NCLAT) on 14.12.2022, which had condoned a 15-day delay in the filing of an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) by a former minority shareholder of Rohit Ferro-Tech Limited. The appellant, a successful resolution applicant whose plan had already been approved by the National Company Law Tribunal (NCLT) on 07.04.2022, contended that the appeal, filed on 23.05.2022 electronically and on 24.05.2022 physically, was barred by limitation, as the total period of 45 days (30 days limitation plus 15 days condonable delay) had expired on 22.05.2022. It was further submitted that Section 4 of the Limitation Act, which permits filing on the next working day if the court is closed on the last day, was inapplicable since 07.05.2022, the 30th day, was a working Saturday.
The respondent, however, argued that the limitation commenced only upon learning of the NCLT’s order on 08.04.2022 through disclosures made to the stock exchange. Citing Section 4 of the Limitation Act, the respondent claimed the initial limitation expired on 08.05.2022 (a Sunday), and thus was extended to 09.05.2022, making the condonable period end on 24.05.2022—the date of actual filing. He also cited genuine difficulties in accessing the order and asserted that there was no deliberate delay.
The Supreme Court addressed the core issue of whether the appeal was filed within the statutory limit under Section 61(2) IBC and whether NCLAT was justified in condoning the delay. Referring to Section 238A of the IBC, which incorporates the Limitation Act into IBC proceedings “as far as may be,” the Court considered provisions including Sections 2(j) and 4 of the Limitation Act. It clarified that while Section 4 applies to the "prescribed period of limitation" when a court is closed on the last day, it does not extend to condonable or discretionary periods beyond the prescribed limit.
Analysing Rule 3 of the NCLAT Rules, 2016 and previous decisions including Sagufa Ahmed and Others v. Upper Assam Plywood Products Private Limited and Others, REEDLAW 2020 SC 09563; Assam Urban Water Supply; Bhimashankar; and My Preferred Transformation, the Court confirmed that the benefit of Section 4 is limited strictly to the initial limitation period, not to any condonable extensions under the IBC. The Court reaffirmed in line with V. Nagarajan v. SKS Ispat and Power Limited and Others, REEDLAW 2021 SC 10518, that the limitation begins from the date of pronouncement of the order, not the date of receipt, although time taken to obtain a certified copy can be excluded if diligently pursued under Section 12(2) of the Limitation Act.
In the present case, the Court noted that the NCLT’s order had been promptly communicated through stock exchange disclosures and treated 07.04.2022 as the starting point for limitation. Since the appeal was filed after the permissible 45-day window expired on 22.05.2022, the Court held that it was barred by limitation. The benefit of Section 4 of the Limitation Act was not available, and the NCLAT had no jurisdiction to condone delay beyond the statutory limit.
The Court reiterated that the IBC is a time-bound process designed to ensure finality and speed in insolvency resolution. It held that the NCLAT, as a statutory tribunal, cannot invoke equitable considerations or exceed its conferred powers. As such, the NCLAT’s order condoning the delay was declared ultra vires and was accordingly set aside. The appeal was allowed, all connected miscellaneous applications were closed, and no order as to costs was made.
Mr. Ramji Srinivasan, Senior Advocate, with Argus Partners comprising Mr. Udit Mediratta, Mr. Shivkrit Rai and Ms. Apeksha Singh, Mr. Arjun Bhatia, and Ms. Shefali Munde, Advocates, represented the Appellant.
Mr. Brijesh Singh Bhaduriya, Mr. Aviral Kapoor, Ms. Sonal Alagh, Mr. Divyanshu Jha, Mr. Vedant Singh, Ms. Shagufa Salim, Ms. Ekta Choudhary, Mr. Anand Krishna, and Mr. Ayush Kumar, Advocates, appeared for the Respondents.
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