On May 1, 2023, the Supreme Court of India in the case of, Sanket Kumar Agarwal v. APG Logistics Private Limited, held that the period taken by the court to provide a certified copy of the order is to be excluded while determining the period of limitation under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 ("Code"). The period of limitation is to be computed from the date of e-filing the Appeal before the National Company Law Appellate Tribunal ("NCLAT").
- The Appellant filed an Application under Section 7 of the Code seeking initiation of Corporate Insolvency Resolution Process against the Respondent. The National Company Law Tribunal ("NCLT") dismissed the Application vide an Order dated August 26, 2022.
- On September 2, 2022, the Appellant filed an application for obtaining the certified copy of the Order dated August 26, 2022, which was received by the registry on September 5, 2022.
- On September 15, 2022, the Order dated August 26, 2022 was uploaded on the website of NCLT and a certified copy was provided to the Appellant on the same day.
- 4. On October 10, 2022, the Appellant e-filed the Appeal and physical copy of the Appeal was filed on October 31, 2022.
Submissions of Appellant:
- The Appellant had considered August 26, 2022 to be the date from which limitation would commence.
- The period of 30 days to file the Appeal expired only on October 5, 2022 after accounting for exclusion of 10 days on account of the time taken to provide a certified copy of the Order.
- The NCLAT has erroneously considered the period from the day when the certified copy of the Order was applied till it was received. It has also erroneously considered the day on which the order was passed, which is in teeth of Section 12(2) of the Limitation Act, 1963 and Rule 3 of the National Company Law Appellate Tribunal Rules, 2016.
- The Appellant was not in a position to draft the Appeal prior to September 15, 2022, i.e., the day on which the certified copy of the Order was made available to the Appellant and the day on which the Order dated August 26, 2022 was uploaded.
Submissions of Respondent:
- On January 3, 2021, a Circular was issued by the NCLAT notifying a Standard Operating Procedure for e-filing, under which, physical copies of the Appeal were required to be filed.
- On October 21, 2022, another Order was issued by the Registrar of NCLAT clarifying that the period of limitation shall be computed from the date of presentation of the Appeal, meaning thereby that the period of limitation would only cease after a physical copy was presented.
- On December 24, 2022, the Registrar of NCLT withdrew its Order dated October 21, 2022 and notified for the first time that limitation shall be computed from the date of e-filing the Appeal.
- The e-filing of the Appeal would not cease the limitation.
Decision of NCLAT:
It was held that the Appeal was e-filed on October 10, 2022, which was the 46th day after the Order dated August 26, 2022 was pronounced. Section 61 of the Code does not visualize that an aggrieved person has to wait till he is in receipt of a certified copy of the impugned order before preferring an Appeal. Even as per the case of the Appellants, the period of 30 (Thirty) days ended on October 4, 2022, whereas, the Appeal was filed on October 10, 2022. The 10 (Ten) days were spent prior to the Application for a certified copy and upon receipt of the certified copy of the Order dated August 26, 2022, another period of 20 (Twenty) days had lapsed. In light of these observations, NCLAT, vide Judgment dated January 9, 2023, held that the Appeal was barred by limitation.
Section 61 of the Code states as under:
"(1) Notwithstanding anything to the contrary contained under the Companies Act 2013, any person aggrieved by the order of the Adjudicating Authority under this part may prefer an appeal to the National Company Law Appellate Tribunal.
(2) Every appeal under sub-section (1) shall be filed within thirty days before the National Company Law Appellate Tribunal:
Provided that the National Company Law Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days...."
Rule 3 of NCLAT Rules, 2016 states as under:
"Computation of time period.- Where a period is prescribed by the Act and these rules or under any other law or is fixed by the Appellate Tribunal for doing any act, in computing the time, the day from which the said period is to be reckoned shall be excluded, and if the last day expires on a day when the office of the Appellate Tribunal is closed, that day and any succeeding day on which the Appellate Tribunal remains closed shall also be excluded."
Rule 22 of NCLAT Rules, 2016 states as under:-
"Presentation of appeal.-
(1) Every appeal shall be presented in Form NCLAT-1 in triplicate by the appellant or petitioner or applicant or respondent, as the case may be, in person or by his duly authorised representative duly appointed in this behalf in the prescribed form with stipulated fee at the filing counter and non-compliance of this may constitute a valid ground to refuse to entertain the same...."
Rule 103 of NCLAT Rules, 2016 states as under:-
"Filling through electronic media.-
The Appellate Tribunal may allow filing of appeal or proceedings through electronic mode such as online filing and provide for rectification of defects by e-mail or internet and in such filing, these rules shall be adopted as nearly as possible on and form a date to be notified separately and the Central Government may issue instructions in this behalf from time to time..."
Decision of Supreme Court:
The Supreme Court of India held that the date on which the order was pronounced by NCLT was to be excluded for the purposes of determining period of limitation, which is in consonance with Section 12(1) of the Limitation Act, 1963. It also held that the time taken by the court to provide the certified copy of the order is to be excluded from the period of limitation with the caveat that the Appellant had applied for the certified copy of the Order within the prescribed period of limitation under Section 61(2) of the Code. It was held that the period of limitation taken by the court for preparing the order before an application for a copy is made shall not be excluded.
The Supreme Court of India also directed the Union Government to oversee the rules to encourage e-filing across tribunals.
By virtue of this Judgment, it is pertinent to immediately apply for the certified copy of the Judgment, which period shall stand excluded. It is also now abundantly clear that e-filing of the Appeal would be the determining period for the purpose of limitation.
Please find attached acopy of the judgment.
Originally published by 31 May, 2023
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