The Supreme Court passed the order in Civil Appeal No. 7882 of 2023, addressing a critical question regarding the computation of limitation periods under the Insolvency and Bankruptcy Code, 2016. The judgment clarifies the exact point for the limitation clock when an aggrieved party seeks to challenge an order from the National Company Law Appellate Tribunal before the highest judicial forum.
The legal dispute originated from the corporate insolvency resolution process of M/s Samyu Glass Private Limited. Between 2013 and 2017, the Central Excise and Service Tax Department had initiated multiple recovery proceedings against the corporate debtor. During the insolvency proceedings, the tax department submitted a claim for over twenty two crore rupees. However, the National Company Law Tribunal approved a resolution plan that allocated only one lakh thirty four thousand rupees toward the excise arrears. The tax department challenged this allocation, but the National Company Law Appellate Tribunal confirmed the approved resolution plan on August 2, 2023. The department subsequently filed a civil appeal on November 21, 2023.
Upon reaching the highest court, the resolution professional raised a preliminary objection regarding the limitation period. Section 62 of the Insolvency and Bankruptcy Code grants an aggrieved party forty five days to file an appeal, with a discretionary condonable period of an additional fifteen days if sufficient cause is shown. The resolution professional argued that the appeal was filed well beyond this absolute sixty day ceiling. Conversely, the appellant contended that the statutory language “within forty five days from the date of receipt of such order” meant the limitation clock should only begin on October 11, 2023, the date they received the certified copy.
The Court passed the order rejecting the appellant’s interpretation, grounding its decision in the strict, time bound architecture of the Insolvency and Bankruptcy Code. The Court emphasized the legal maxim vigilantibus et non dormientibus jura subveniunt, noting that the law assists those who are vigilant, not those who sleep on their rights. The judgment clarified that knowledge of the order and the limitation period commence on the day the tribunal pronounces the decision in open court.
While Section 12(2) of the Limitation Act excludes the time requisite for obtaining a certified copy, it does not excuse inaction. The Court noted that the appellant waited thirty five days after the August 2, 2023 pronouncement before applying for a certified copy on September 6, 2023. This period of delay counted directly against the initial forty five day window. Although the thirty five days the registry took to prepare the copy were excluded, the appellant consumed an additional forty one days after receiving the document to file the appeal.
By summing the actionable periods, the Court found a total delay of seventy six days, exceeding the absolute statutory limit of sixty days. Allowing the limitation period to begin only when a litigant chooses to collect a copy would render the timeline indefinite and fluctuating, directly contradicting legislative intent. Consequently, the preliminary objection was sustained, and the civil appeal was dismissed as barred by limitation.
Read the Judgment here.