Sanket Kumar Agarwal vs APG Logistics Private Limited
Civil Appeal no 748 of 2023
Facts:
1.An application by Appellant under Section 7 of the IBC in June 2021 seeking the initiation of the Corporate Insolvency Resolution Process against the respondent which was dismissed vide order dated 26.08.2022.
2.On 2 September 2022, the appellant filed an application for obtaining a certified copy of the order which was pronounced by the NCLT. The application was received by the Registry of NCLT on 5 September 2022. On 15 September 2022, the order was uploaded on the website of the NCLT and a certified copy was provided to the appellant on the same day. The appellant lodged an appeal before the NCLAT on 10 October 2022 in the e-filing mode along with an Interlocutory Application4 seeking condonation of delay of five days
3.NCLAT observed that the appeal was lodged through the e-portal on 10 October 2022, which was the 46th day after the order of the NCLT. It observed that while Section 61(2) of the IBC prescribes a 30-day deadline for preferring an appeal against an order of the adjudicating authority, the appellate tribunal can condone a delay of upto 15 days, if sufficient cause is shown. Furthermore, it held that the ingredients of Section 61 of the IBC do 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.
4.NCLAT held that appeal is barred by limitation.
Issue: Whether the appeal was barred by limitation as held by the NCLAT?
Arguments:
For Appellant:
1.It was submitted that NCLAT ought to have excluded the period from 5 September 2022, when an application for obtaining a certified copy was filed till 15 September 2022, when the certified copy was received, while computing the period of limitation.
2.It was submitted that NCLAT has erroneously taken the entire period between 26 August 2022 and 10 October 2022 by failing to exclude the date on which the order was pronounced, namely, 26 August 2022 in terms of Section 12(2) of the Limitation Act 1963 and Rule 3 of the National Company Law Appellate Tribunal Rules 2016.
3.It was submitted that Order of the NCLT was uploaded on the website on 15 September 2022 on which day the certified copy was also made available, it was impossible for the appellant to draft an appeal prior to 15 September 2022 based merely on the pronouncement of the order without knowledge of the grounds for dismissal.
For Respondent:
1.It was submitted by the counsel that a circular was issued by the NCLAT notifying a Standard Operating Procedure7 for e-filing in terms of which physical copies were required to be filed as per the procedure prescribed under the NCLAT Rules 2016 along with the e-filing receipt.
2.On 21 October 2022, a further order was issued by the Registrar of NCLAT clarifying that the period of limitation shall be computed from the date of the presentation of the appeal as per Rule 22 of the NCLAT Rules 2016, the effect of which was that the period of limitation would cease to run only after a physical copy was presented. By an order of 24 December 2022, notified by the Registrar of the NCLAT, the earlier order dated 21 October 2022 was withdrawn and it was notified for the first time that limitation shall be computed with reference to the date of e-filing; and Even the e-filing of the appeal on 10 October 2022 would not result in limitation ceasing to operate and it was only when a hard copy was filed that limitation would stop running.
Decision: Appeal was not barred by limitation. Hon’ble Supreme Court allowed the appeal and set aside the order of NCLAT.
Rationale:
1.Hon’ble Supreme Court noted that the appeal was e-filed on 10 October 2022 and even a physical copy was lodged on 31 October 2022 prior to n the date on which the order of the Registrar dated 21 October 2022 was to come into effect. The order dated 21 October 2022 was subsequently withdrawn on 24 December 2022. The order dated 24 December 2022 now clarifies that limitation would be computed with effect from the date of e-filing but a physical copy would have to be filed within seven days of e-filing.
2.The order was pronounced by the NCLT on 26 August 2022. Rule 3 of the NCLAT Rules 2016 stipulates that the date from which the period of limitation has to be reckoned (i.e., the date of the pronouncement of the order) would have to be excluded. Hence, the date on which the order was pronounced by the NCLT, namely 26 August 2022 would have to be excluded from the computation of limitation.
3.Between 26 August 2022, when the order was pronounced by the NCLT, and 10 October 2022, when the appeal was e-filed, a period of 45 days elapsed after excluding the date on which the order was pronounced. The NCLAT has erroneously proceeded on the basis that the appeal was lodged on the 46th day whereas correctly computed, the appeal was lodged on the 45th day.
4.It also noted that it cannot but fail to notice the flip-flops on the part of the NCLAT in providing administrative guidance on whether limitation would commence from the date of e-filing or from the presentation of the appeal at the filing counter. With technological advances, the country’s judiciary and tribunals must move towards efiling. This process has already commenced and is irreversible. The Union Government must have a fresh look at the rules to encourage e-filing across tribunals.
Order Copy:
