[Civil Appeal No 6187 of 2019]
The Supreme Court has held that the National Company Law Appellate Tribunal (NCLAT) does not have the jurisdiction or power to condone a delay exceeding 15 days in any appeal filed against a decision of the National Company Law Tribunal (NCLT) under §61(2) of the Insolvency and Bankruptcy Code 2016 (IBC). §61(2) says that an appeal to the NCLAT must be filed within 45 days (30 days, plus a maximum extension of a further 15 days on showing sufficient cause). The Supreme Court also held that delay could not even be condoned under Article 142 of the Constitution which prescribes extraordinary powers for effecting complete justice in any case.
The Corporate Insolvency Resolution Process was initiated against Dunar by the NCLT and an Insolvency Resolution Professional (IRP) was appointed. National Spot Exchange Ltd (NSEL) filed its claim for ₹673.85 crores with the IRP, but the IRP rejected the claim because there was no privity of contract between NSEL and Dunar.
NSEL challenged the IRP's decision before the NCLT, which was rejected. NSEL then filed an appeal before the NCLAT, but there was a delay of 44 days beyond the maximum stipulated period of 45 days. The NCLAT dismissed the appeal and held that it had no jurisdiction to condone a delay beyond the statutory period provided. NSEL appealed to the Supreme Court.
Arguments before the Supreme Court and Findings
NSEL argued that even if the NCLAT was justified in dismissing the appeal on the ground of limitation, considering the quantum of the claim the Supreme Court could condone the delay by exercising its extraordinary powers under Article 142.
The IRP relied upon the Supreme Court decision in Oil & Natural Gas Corporation Ltd v Gujarat Energy Transmission Corporation Ltd1, which held that delay beyond 120 days in filing an appeal under the Electricity Act 2003 was not condonable, even under Article 142, and argued that where a statute provides that a delay can only be condoned up to a particular number of days, any condonation of delay beyond that maximum period would come within the ambit of legislation so any deviation was impermissible even under Article 142.
The Supreme Court confirmed the ruling of the NCLAT and said that §61(2) of the IBC clearly stated that the NCLAT does not have the jurisdiction to condone any delay in filing an appeal once the stipulated 45 days has expired. In relation to NSEL's argument on Article 142, the Supreme Court considered the language used in §61(2) of the IBC and held that Parliament did not carve out an exception to condone any delay beyond that specified in the IBC. In such a situation, if the Supreme Court were to condone the delay by exercising powers under Article 142, it would be circumventing the statutory provisions of the IBC, which is not permissible under law.
1. AIR 2017 SC 1352.
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