A) ABSTRACT / HEADNOTE

The judgment delivered by the Supreme Court in A. Rajendra v. Gonugunta Madhusudhan Rao & Ors. authoritatively settles the commencement point of limitation for filing appeals under Section 61 of the Insolvency and Bankruptcy Code, 2016. The controversy arose from the dismissal of appeals by the National Company Law Appellate Tribunal on the ground of limitation, where the appellant asserted that limitation should commence from the date of knowledge or receipt of a certified copy rather than from the date of pronouncement of the order. The Court rejected this contention and reaffirmed that the triggering event for limitation is the date of pronouncement of the order, except in cases where the order is not pronounced and is later uploaded.

The judgment reinforces the strict and time-bound framework of the IBC and emphasizes that procedural flexibility cannot be employed to dilute substantive legislative intent. The Court meticulously interpreted Section 61(2) of the IBC, its proviso, and the interplay with the Limitation Act, 1963 and NCLAT Rules, 2016. It clarified that the right to receive a free certified copy does not dispense with the obligation to apply for one and that exclusion of time under Section 12 of the Limitation Act is available only upon a formal application for a certified copy.

The ruling strengthens certainty in insolvency jurisprudence, curtails dilatory tactics, and upholds the primacy of the IBC over general procedural statutes. It also reiterates judicial discipline by refusing to extend limitation beyond statutorily prescribed limits, even through equitable considerations or Article 142 powers.

Keywords: Insolvency and Bankruptcy Code, Limitation, Condonation of Delay, Certified Copy, NCLAT Appeals

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

The decision arises within the statutory ecosystem of the Insolvency and Bankruptcy Code, 2016, a legislation designed to ensure certainty, predictability, and expedition in insolvency proceedings. The Code prescribes strict timelines and limits judicial discretion in condonation matters to preserve the commercial efficacy of insolvency resolution. Appeals under the Code are governed by Section 61, which prescribes a rigid thirty-day limitation period, extendable by only fifteen days upon showing sufficient cause.

The appellant, a suspended Managing Director and shareholder of the corporate debtor, invoked Section 60(5) of the IBC before the NCLT challenging rejection of his resolution plan and approval of another plan. Two separate NCLT orders dated 20 July 2023 triggered the appellate process. Appeals before the NCLAT were filed without applications for condonation of delay and were later supplemented with inconsistent explanations regarding limitation.

The NCLAT dismissed both appeals on grounds of limitation, suppression of material facts, and non-compliance with procedural requirements. The Supreme Court was thus called upon to examine whether limitation under the IBC begins from the date of pronouncement or from the date of communication or knowledge of the order, and whether procedural rules could soften statutory mandates.

D) FACTS OF THE CASE

The appellant filed two applications before the National Company Law Tribunal under Section 60(5) read with Section 35(1)(n) of the IBC. One application sought directions to place his resolution plan before the Committee of Creditors, while the other challenged the approval of a competing resolution plan submitted by a consortium. Both applications were decided by the NCLT through orders pronounced on 20 July 2023.

Aggrieved, the appellant preferred two appeals before the NCLAT on 28 August 2023. Notably, the appeals were filed without accompanying applications for condonation of delay and contained assertions that they were filed within limitation. Respondents raised objections regarding limitation, compelling the appellant to file condonation applications at a later stage.

In one appeal, reliance was placed on a free certified copy received on 01 August 2023. In the other, the appellant contended that limitation commenced from 07 August 2023, the date on which the Resolution Professional allegedly communicated the order. Subsequently, it was admitted that no certified copy had ever been applied for.

The NCLAT found the appellant guilty of making false averments, taking inconsistent stands, and failing to comply with Rule 22 of the NCLAT Rules. It dismissed the appeals as barred by limitation. The Supreme Court was approached against this dismissal.

E) LEGAL ISSUES RAISED

i. Whether the period of limitation under Section 61(2) of the IBC commences from the date of pronouncement of the order or from the date of communication or knowledge of the order?
ii. Whether the non-filing of an application for condonation of delay along with the appeal is a curable defect under the IBC?
iii. Whether the time taken for preparation of a certified copy can be excluded without applying for such copy under Section 12 of the Limitation Act?
iv. Whether procedural rules can be interpreted to dilute the strict timelines prescribed under the IBC?

F) PETITIONER / APPELLANT’S ARGUMENTS

The counsels for the appellant submitted that effective filing of an appeal is impossible without knowledge of the contents of the order and hence limitation should commence from the date of receipt or communication. It was argued that since the appeal was filed within forty-five days from the date of pronouncement, the delay was condonable under the proviso to Section 61(2).

Reliance was placed on Section 12(3) of the Limitation Act to contend that time spent in obtaining legal opinion and preparing the appeal constituted sufficient cause. It was also urged that non-filing of condonation applications along with the appeal was a procedural lapse and curable.

The appellant further relied upon Sesh Nath Singh v. Baidyabati Sheoraphuli Co-operative Bank Ltd. to argue that filing of a formal condonation application was not mandatory.

G) RESPONDENT’S ARGUMENTS

The counsels for the respondents contended that the appellant deliberately suppressed material facts and made false declarations regarding limitation. It was emphasized that no certified copy was ever applied for and hence exclusion under Section 12 was unavailable.

The respondents relied upon V. Nagarajan v. SKS Ispat and Power Ltd. to submit that limitation under the IBC begins from the date of pronouncement. They argued that the appellant’s inconsistent stands disentitled him from discretionary relief and that the NCLAT lacked jurisdiction to condone delay beyond statutory limits.

H) RELATED LEGAL PROVISIONS

i. Section 61(2), Insolvency and Bankruptcy Code, 2016
ii. Proviso to Section 61(2), IBC
iii. Section 12(2), Limitation Act, 1963
iv. Rule 22(2), NCLAT Rules, 2016
v. Rule 50, NCLAT Rules, 2016

I) JUDGMENT 

The Supreme Court upheld the dismissal of the appeals and affirmed the reasoning of the NCLAT. It held that Section 61(2) prescribes a strict thirty-day limitation period, extendable only by fifteen days upon sufficient cause, and this framework must be strictly construed. The Court emphasized that this limitation is not a matter of right and is subject to judicial satisfaction.

The Court relied heavily on V. Nagarajan v. SKS Ispat and Power Ltd. to reiterate that the IBC consciously omits the phrase “date of communication” and instead anchors limitation to pronouncement. The Court clarified that allowing litigants to wait for certified copies would undermine the time-bound insolvency regime.

It was further held that Rule 22(2) of the NCLAT Rules mandates filing of a certified copy, and the right to receive a free copy does not eliminate the obligation to apply. Exclusion under Section 12 of the Limitation Act is available only after such application.

The Court rejected reliance on equitable considerations and reaffirmed that even Article 142 powers cannot override express statutory limitations.

a) RATIO DECIDENDI

The ratio of the judgment is that limitation for filing an appeal under Section 61(2) of the IBC commences from the date of pronouncement of the order. In cases where the order is not pronounced, limitation begins from the date of uploading. The period for exclusion under Section 12 of the Limitation Act is available only when a certified copy is applied for. Procedural rules cannot be interpreted to defeat the substantive objectives of the IBC.

b) OBITER DICTA

The Court observed that frequent waivers granted by tribunals regarding certified copies do not create enforceable rights. It also cautioned against litigants adopting inconsistent stands to overcome statutory barriers.

c) GUIDELINES

i. Appeals under the IBC must strictly adhere to timelines under Section 61(2)
ii. Certified copies must be formally applied for to claim exclusion under Section 12
iii. Free copies do not dispense with procedural compliance
iv. Delay beyond fifteen days cannot be condoned
v. Procedural flexibility cannot override legislative intent

J) REFERENCES

a) Important Cases Referred

i. V. Nagarajan v. SKS Ispat and Power Ltd., [2021] 14 SCR 736
ii. Cethar Ltd. v. SKS Ispat & Power Ltd., (2002) 2 SCC 244
iii. National Spot Exchange Ltd. v. Anil Kohli, (2022) 11 SCC 761
iv. Sanjay Pandurang Kalate v. Vistra ITCL India Pvt. Ltd., (2024) 3 SCC 27
v. Sesh Nath Singh v. Baidyabati Sheoraphuli Co-operative Bank Ltd., (2021) 7 SCC 313

b) Important Statutes Referred

i. Insolvency and Bankruptcy Code, 2016
ii. Limitation Act, 1963
iii. NCLAT Rules, 2016