Sansar Investment & Finance Company Private Limited Vs Atlantic Spinning And Weaving Mills Limited (NCLAT Chennai)
The appeal before the Appellate Tribunal arose from an order of the NCLT Hyderabad Bench dated 04.09.2024, which had dismissed an appeal filed under Section 42 of the Insolvency and Bankruptcy Code (IBC) on the ground of limitation. The core issue was whether the delay in filing the appeal could be condoned by invoking Section 5 of the Limitation Act read with Section 238A of the IBC.
Section 42 of the IBC provides a statutory remedy for a creditor to appeal against the decision of a liquidator rejecting a claim, with a prescribed limitation period of 14 days from the date of receipt of such decision. In the present case, the liquidator had rejected the appellant’s claim, and the decision was communicated via email on 19.02.2020. The Tribunal noted that this date triggered the limitation period, requiring the appeal to be filed within 14 days.
The appellant contended that the limitation period should be liberally construed and extended, particularly because parallel CIRP-related proceedings were pending before the Appellate Tribunal. It was also argued that Section 238A of the IBC allows application of the Limitation Act, including Section 5, thereby permitting condonation of delay. Additionally, reliance was placed on earlier observations of the Tribunal suggesting that limitation issues could be examined in light of Section 238A.
