Recently, in Bombay Stock Exchange Ltd. v. Mrudula Brodie and Ors.,1 the National Company Law Appellate Tribunal (“NCLAT”) provided significant insight on whether the 15-day condonable period for filing an appeal under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 (“Code”) could be extended if the last day of such period falls on a day on which the NCLAT was not in session. Section 61(2) of the Code provides that appeals to the NCLAT must be filed within 30 days. However, the NCLAT has been empowered to condone any delay in filing an appeal for sufficient reasons provided the delay does not exceed 15 days from the end of the prescribed 30-day period.
Brief Facts of the case:
The National Company Law Tribunal (“NCLT”) passed an order on 31.07.2024 allowing a certain application. Aggrieved by this order, the Bombay Stock Exchange and the National Stock Exchange filed separate appeals before the NCLAT. However, these appeals were filed on 17.09.2024, i.e., beyond the prescribed 30-day period. Nonetheless, the Appellants were of the view that their appeals could be admitted as they were within the 15-day condonable period.
One of their main contentions was that since the last day of the 15-day condonable period fell on a holiday and the appeals having been filed on the next day after the holiday, the appeals were filed within the condonable period and, therefore, may be admitted. The Appellants based their contention on Rule 3 of the NCLAT Rules, 2016 which states that if the last day for filing an appeal falls on a day when the NCLAT is closed, then that day and any following day during which the NCLAT remains closed shall be excluded for calculating the limitation period.
The NCLAT was thus asked to consider whether Rule 3 of the NCLAT Rules, 2016 would be applicable to the 15-day condonable period in Section 61(2) of the Code.
Ruling of the NCLAT:
For the sake of quick reference, Rule 3 of the NCLAT Rules, 2016 is reproduced below:
“Computation of time period.- Where a period is prescribed by the Act and these rules or under any other law or is fixed by the Appellate Tribunal for doing any act, in computing the time, the day from which the said period is to be reckoned shall be excluded, and if the last day expires on a day when the office of the Appellate Tribunal is closed, that day and any succeeding day on which the Appellate Tribunal remains closed shall also be excluded”
The NCLAT held that Rule 3 would not be applicable to the 15-day condonable period. The NCLAT interpreted the phrase “Where a period is prescribed by the Act and these rules or under any other law or is fixed by the Appellate Tribunal for doing any act” to mean the period prescribed for filing an appeal under Section 61(2) of the Code, which is 30 days. The NCLAT was of the view that the 15-day condonable period cannot be taken into consideration while determining what the prescribed period for filing an appeal is. The NCLAT is only empowered to condone delay up to 15 days. This does not mean that the prescribed period of 30 days is superseded. The period prescribed by the Code for filing the appeal would remain 30 days and therefore, Rule 3 would apply only to the filing of the appeal and not to condone the delay in filing the appeal. In arriving at this conclusion, the NCLAT also relied on its previous decision in State Bank of India v. Darwin Platform Infrastructure Ltd. & Ors.2
In the present case, the NCLAT dismissed one of the appeals on having been filed even beyond the 15-day condonable period. However, in the other appeal, the NCLAT admitted the appeal as it held that the said appeal was filed within the condonable period and there were sufficient grounds for condoning the delay. To give some context, the relevant dates are given below:
| Relevant dates in the appeal that was dismissed | Relevant dates in the appeal that was admitted |
| Date of impugned order: 31.07.2024 | Date of impugned order: 31.07.2024 |
| Start of limitation period: 01.08.2024 | Start of limitation period: 01.08.2024 |
| Additional 2 days added to the limitation period as the Appellant in this case had applied for and obtained a certified copy of the impugned order, which took 2 days. | |
| Expiry of 30-day period: 30.08.2024, Friday, working day of NCLAT. | Expiry of 30-day period, considering the additional 2 days: 01.09.2024, Sunday (Holiday). However, as 01.09.2024 is a Sunday, the limitation for filing the appeal, as per Rule 3 would expire on 02.09.2024 |
| Expiry of 15-day condonable period: 14.09.2024 | Expiry of 15-day condonable period from: 17.09.2024 |
| Appeal before NCLAT filed on: 17.09.2024 | Appeal before NCLAT filed on: 17.09.2024. Sufficient cause shown for filing appeal within condonable period |
| Appeal dismissed | Appeal Allowed |
Footnotes
1. NCLAT, Principal Bench, Company Appeal (AT) (Insolvency) No. 1862 of 2024 & Interlocutory Application No.6846 of 2024 with Company Appeal (AT) (Insolvency) No. 1883 of 2024 & Interlocutory Application No.6950 of 2024.
2. NCLAT, Principal Bench, Interlocutory Application No. 5067 of 2023 in Company Appeal (AT) (Insolvency) No. 1354 of 2023.
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