Sanjay Pandurang Kalate Vs Vistra ITCL (India) Limited and Others (Supreme Court of India)
Supreme Court held that period of limitation provided under section 61(2) of the IBC began from the date of upload of order in case where date of upload of order and date of pronouncement is not on same date.
Facts- Respondent 1, Vistra ITCL (India) Limited filed an application u/s. 7 of the IBC seeking the initiation of the Corporate Insolvency Resolution Process against Evirant Developers Private Limited, the Corporate. The appellant is a former director of the Corporate Debtor, who alleges that the Section 7 application filed by respondent 1 is based on collusion with the various respondents, including respondent 2 and respondent 3, who are former directors of the Corporate Debtor. The appellant filed an interlocutory application before the NCLT alleging inter alia that the reply to the Section 7 application on behalf of the Corporate Debtor was filed by respondent 2 without authorization of the Board of Directors or intimation to the appellant.
On 17 May 2023, NCLT heard the application filed by the From the submissions and on a specific query of the Court, it appears that it is not in dispute between the counsel for the appellant and the respondent that on 17 May 2023, the order of the NCLT was not pronounced and no substantive order was passed. The order was uploaded by the Registry of the NCLT on 30 May 2023 though the order carries the date of 17 May 2023. By the order, the NCLT dismissed the appellant’s application on the grounds that the application was filed without authorization from the Board of Directors of the Corporate Debtor and was prima facie frivolous, to delay the proceedings in the Section 7 application. The appellant applied for a certified copy on 30 May 2023, which was received on 1 June 2023. The appeal against the order was e-filed before the NCLAT on 10 July 2023. The appellant filed an application for condonation of delay along with the appeal.
Separately, it may be noted that on 19 May 2023, the NCLT allowed respondent 1’s Section 7 application and initiated CIRP against the Corporate Debtor. The appellant’s appeal against the order has been dismissed by the NCLAT on 05 October 2023.
Conclusion- Held that the period of limitation began to run on 30 May The 30- day limitation period provided in Section 61(2) of the IBC concluded on 29 June 2023. Though the appeal was filed beyond the period of thirty days, it was within the condonable period of fifteen days. We are of the considered view that the appeal should be restored to the NCLAT for reconsidering whether the appellant has shown sufficient cause for condoning the delay beyond thirty days.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Admit.
2. These appeals arise under Section 62 of the Insolvency and Bankruptcy Code 20161from a judgement dated 14 September 2023 of the National Company Law Appellate Tribunal.2 The NCLAT dismissed the appeal against the order of the National Company Law Tribunal, Mumbai3 on the ground of limitation.
3. At the outset, it is clarified that the findings in this judgement are limited to a determination of the question of The detailed facts and averments on the merits of the larger dispute between the parties are not analysed in the judgment.
4. Briefly, respondent 1, Vistra ITCL (India) Limited filed an application under Section 7 of the IBC seeking the initiation of the Corporate Insolvency Resolution Process4against Evirant Developers Private Limited, the Corporate The appellant is a former director of the Corporate Debtor, who alleges that the Section 7 application filed by respondent 1 is based on collusion with the various respondents, including respondent 2 and respondent 3, who are former directors of the Corporate Debtor. The appellant filed an interlocutory application before the NCLT alleging inter alia that the reply to the Section 7 application on behalf of the Corporate Debtor was filed by respondent 2 without authorization of the Board of Directors or intimation to the appellant.
5. On 17 May 2023, the NCLT heard the application filed by the From the submissions and on a specific query of the Court, it appears that it is not in dispute between the counsel for the appellant and the respondent that on 17 May 2023, the order of the NCLT was not pronounced and no substantive order was passed. The order was uploaded by the Registry of the NCLT on 30 May 2023 though the order carries the date of 17 May 2023. By the order, the NCLT dismissed the appellant’s application on the grounds that the application was filed without authorization from the Board of Directors of the Corporate Debtor and was prima facie frivolous, to delay the proceedings in the Section 7 application. The appellant applied for a certified copy on 30 May 2023, which was received on 1 June 2023. The appeal against the order was e-filed before the NCLAT on 10 July 2023.
6. The appellant filed an application for condonation of delay along with the appeal. The appellant contended that (i) the appellant became aware of the contents of the order only on 30 May 2023 and the limitation period should run from this date; (ii) the NCLAT was closed for summer vacations between 05 June 2023 and 02 July 2023 and this period should be excluded from the calculation of limitation.
7. In the background of the above events, the issue before the NCLAT was whether the appeal was instituted within limitation. In its impugned order, the NCLAT concluded that the appeal was barred by limitation on the ground that it was instituted beyond the outer limit of 45 days permissible under Section 61 of the IBC. The NCLAT relied on this Court’s decision in V Nagarajan SKS Ispat5and rejected the appellant’s contention that the time should begin to run from 30 May 2023 – the date of upload. As the limitation period was found to have begun on 17 May 2023, the filing of the appeal on 10 July 2023 was held to be beyond the outer limit of 45 days prescribed under the IBC. Further, the NCLAT rejected the contention that the annual summer vacations from 05 June 2023 to 02 July 2023 should be excluded as the NCLAT had issued a notification stating that the registry would remain open and filing of appeals was permissible during the vacation. Accordingly, the appeal was dismissed as barred by limitation.
8. Separately, it may be noted that on 19 May 2023, the NCLT allowed respondent 1’s Section 7 application and initiated CIRP against the Corporate Debtor. The appellant’s appeal against the order has been dismissed by the NCLAT on 05 October 2023.
9. The table below indicates the relevant dates:
