SC – NCLAT cannot condone a delay beyond the statutory period of 15 days as stipulated under section 61(2) of the IBC

National Spot Exchange Ltd. vs Anil Kohli, Resolution Professional for Dunar Foods Limited; Civil Appeal No. 6187 of 2019; Supreme Court of India

The Appellant approached the Hon’ble Supreme Court when the NCLAT refused to condone the delay of 44 days in preferring the appeal against the order passed by the NCLT, rejecting the claim of the appellant.

The appellant being aggrieved and dissatisfied with the order passed by the NCLT dated 6.3.2019, the appellant herein preferred an appeal before the NCLAT. There was a delay of 44 days in preferring the said appeal. The appeal before the NCLAT was required to be filed within a maximum period of 45 days (30 days + 15 days). However, there was a further delay of 44 days beyond a total period of 45 days. Therefore, considering sub-section (2) of Section 61 of the IBC which provides for powers to the Appellate Tribunal to condone the delay of only 15 days which it can condone over the period of 30 days, if there is a sufficient cause, by the impugned order, the learned Appellate Tribunal has dismissed the appeal on the ground that the Appellate Tribunal has no jurisdiction to condone the delay beyond 15 days and thereby the appeal is barred by limitation. Therefore, being aggrieved and dissatisfied from the said order of the NCLAT, the Appellant approached the Hon’ble Supreme Court.

Contentions of the appellant:

In the case at hand, where a huge amount of Rs. 693 crores are involved, which is due and payable to the appellant herein, which can be said to be a public body which provided an electronic exchange platform which commenced its operations after the Ministry of Consumer Affairs, Government of India granted it an exemption under section 27 of the Forward Contracts (Regulation) Act, 1952 to launch one-day forward contracts for buying and selling of commodities and therefore it is prayed to condone the delay in preferring the appeal before the NCLAT, in exercise of powers under Article 142 of the Constitution of India.

Contentions of Respondent:

Section 61(2) of the Code provides for power of the Appellate Tribunal to condone the delay in the appeal. The Appellate Tribunal can condone the delay of only 15 days over the period of 30 days, if there is a sufficient cause. Beyond the period of 15 days, over the period of 30 days, the Appellate Tribunal has no jurisdiction to condone the delay. Therefore the Appellate Tribunal has rightly and correctly dismissed the appeal on the ground that it did not have the power to condone the delay beyond the period of 15 days, over the period of 30 days, i.e., in the present case the delay of 44 days. as held by this Court in the case of Union of India v. Popular Construction Co., reported in (2001) 8 SCC 470, where the legislature prescribed a special limitation for the purpose of the appeal and the period of limitation of 60 days was to be computed after taking the aid of Sections 4, 5 and 12 of the Limitation Act, the specific inclusion of these sections meant that to that extent only the provisions of the Limitation Act stood extended and the applicability of the other provisions, by necessary implication stood excluded.

Observations:

• The appellant applied for the certified copy of the order passed by the adjudicating authority on 8.4.2019, i.e., after a delay of 34 days. Therefore, even the certified copy of the order passed by the adjudicating authority was applied beyond the prescribed period of limitation, i.e., beyond 30 days. The certified copy of the order was received by the appellant on 11.04.2019 and the appeal before the NCLAT was preferred on 24.06.2019, i.e., after a delay of 44 days. As the Appellate Tribunal can condone the delay up to a period of 15 days only, the Appellate Tribunal refused to condone the delay which was beyond 15 days from completion of 30 days, i.e., in the present case delay of 44 days and consequently dismissed the appeal. Therefore, as such, it cannot be said that the learned Appellate Tribunal committed any error in not condoning the delay of 44 days, which was beyond the delay of 15 days which cannot be condoned as per Section 61(2) of the IB Code.
• An identical question came to be considered by this Court in the case of Popular Construction Co. (2001) 8 SCC 470. While considering Section 34 of the Arbitration and Conciliation Act, 1996 which provided that an application for setting aside of the award cannot be made after three months and it further provided that if the court is satisfied that the applicant was prevented by sufficient cause from making an application within the said period of three months, it may entertain the application within a further period of thirty days, but not thereafter, after considering Section 29 (2) of the Limitation Act and after observing that “Arbitration & Conciliation Act, 1996 is a special law” and that Section 34 of the Arbitration & Conciliation Act, 1996 provides for a period of limitation different from that prescribed under the Limitation Act, ultimately this Court held that Section 5 of the Limitation Act shall not be applicable as the legislature has prescribed a special limitation for the purpose of the appeal as provided under Section 34 of the Arbitration & Conciliation Act, 1996.
• In a given case there may arise a situation where the applicant/appellant may not be in a position to file the appeal even within a statutory period of limitation prescribed under the Act and even within the extended maximum period of appeal which could be condoned owing to genuineness, viz., illness, accident etc.
• However, under the statute, the Parliament has not carved out any exception of such a situation. Therefore, in a given case, it may cause hardship, however, unless the Parliament has carved out any exception by a provision of law, the period of limitation has to be given effect to. Such powers are only with the Parliament and the legislature. The courts have no jurisdiction and/or authority to carve out any exception. If the courts carve out an exception, it would amount to legislate which would in turn might be inserting the provision to the statute, which is not permissible.

Held:

There was a delay of 44 days in preferring the appeal which was beyond the period of 15 days which maximum could have been condoned and in view of specific statutory provision contained in Section 61(2) of the IB Code, it cannot be said that the NCLAT has committed any error in dismissing the appeal on the ground of limitation by observing that it has no jurisdiction and/or power to condone the delay exceeding 15 days.