A recent ruling by the Supreme Court underscores that, under the Insolvency and Bankruptcy Code 2016, the countdown to the filing deadline for an appeal initiates solely upon the uploading of the appealable order on the designated website. The court clarified that the commencement of the limitation period is not tied to the conclusion of hearings, such as the May 17, 2023 date mentioned. Rather, the clock begins ticking only when the relevant order is officially uploaded, emphasizing the significance of the uploaded order as the trigger for the time frame within which an appeal must be filed. The court's reasoning emphasizes the practical necessity of having the order accessible online before the appellant is obligated to initiate the appeal process, highlighting the importance of the actual pronouncement and publication of the order in determining the commencement of the appeal timeline.

The appeal in question was presented before a three-judge bench of the Supreme Court, presided over by Chief Justice DY Chandrachud, alongside Justice JB Pardiwala and Justice Manoj Mishra. The appellant, a former director of the corporate debtor, sought redress against the National Company Law Appellate Tribunal (NCLAT)'s decision to dismiss their appeal. The NCLAT had rejected the appeal on the grounds that it was not submitted within the stipulated limitation period of 45 days, as outlined in Section 62 of the Insolvency and Bankruptcy Code (IBC) of 2016.

In a legal development, Vistra ITCL, a financial creditor, submitted an application to the National Company Law Tribunal (NCLT) Mumbai under Section 7, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Evirant Developers Private Limited, the corporate debtor. In response, the corporate debtor filed an application alleging collusion between the creditor and other former directors.

The NCLT Mumbai conducted a hearing on May 17, 2023, pertaining to the matter. However, an order was not issued on that day. Subsequently, on May 30, 2023, the Registry uploaded the order, which was dated May 17, 2023, and it detailed the dismissal of the application. The order specifically cited that the application was filed without the authorization of the board and was done with the intent to purposefully delay the proceedings.

The appellant, in this case, pursued a certified copy on May 30 and received it on June 1, subsequently e-filing the appeal on July 10, 2023. The appellant argued before the National Company Law Appellate Tribunal (NCLAT) that the 45-day limitation period should initiate from May 30, the date when the order was uploaded. The appellant contended that the period from June 5 to July 2 should be excluded since the NCLAT was closed during that time.

However, the NCLAT dismissed this argument, asserting that the limitation period would commence from May 17. The NCLAT further noted that even though the NCLAT was closed during a certain period, the registry remained open during the vacations. Subsequently, dissatisfied with the NCLAT's decision, the appellant filed an appeal before the Supreme Court challenging the order of the NCLAT.

The Supreme Court, in its deliberations, referenced the rules of the National Company Law Tribunal (NCLT) and emphasized that the NCLT should exercise caution in assigning the same date of the hearing to the order of judgment.

The court advised that to prevent situations like the one at hand, where a matter is heard on a specific day but the order is issued on a later date, the NCLT should refrain from indicating the date of the hearing on the order. This approach, according to the court, would align with the NCLT Rules, which establish a distinction between the date of hearing and the date of pronouncement. The rules explicitly prohibit the NCLT from bypassing the requirement of formally pronouncing the order.

The Supreme Court expressed commendation for the prompt response of the National Company Law Appellate Tribunal (NCLAT) in dispensing with the requirement of filing hard copies in appeal, interlocutory applications, reply, and rejoinder.

The court acknowledged the proactive measures taken by the NCLAT, specifically citing an order issued by the Registrar on May 15, 2023, shortly after the decision in Sanket Agarwal. This order stated that the filing of hard copies for various submissions, including appeals, interlocutory applications, reply, and rejoinder, would no longer be mandatory with immediate effect.

The Supreme Court emphasized the significance of such proactive actions by tribunals in adapting to modernized and technology-friendly judicial processes. It applauded the Chairperson, Members, and the Registry of the NCLAT for taking steps to ensure that advancements in judicial procedures are implemented consistently across all judicial forums in the country.

Even though the calculation of the appeal period commenced from May 30, the actual filing of the appeal took place on July 10. While this filing occurred after the expiration of the initial 30-day appeal period, it falls within the broader 45-day timeframe during which delays can be condoned.

In response to this situation, the Supreme Court took action by remanding the case back to the National Company Law Appellate Tribunal (NCLAT). The Supreme Court directed the NCLAT to evaluate and determine whether the appeal's delay could be condoned, considering the circumstances surrounding the filing and the applicable legal provisions.

Case: Sanjay Pandurang Kalate vs Vistra ITCL (India) Limited and Others,

Civil Appeal Nos 7467-7468 of 2023.

Click to read/download judgment.