Limitation and Section 61 Explained

Introduction

In a crucial ruling dated 7th May 2025, in Tata Steel Ltd. vs. Raj Kumar Banerjee & Ors. [Civil Appeal No. 408 of 2023], the Court examined the rigid timelines under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 (IBC) and reaffirmed that the appellate jurisdiction of the National Company Law Appellate Tribunal (NCLAT) cannot extend beyond the statutorily prescribed and condonable period. The judgment set aside an NCLAT order condoning delay beyond the permissible limit, reinforcing the sanctity of procedural timelines in insolvency proceedings.

Facts of the Case

Tata Steel Ltd., the appellant, was the successful resolution applicant for Rohit Ferro-Tech Ltd. whose resolution plan was approved by the Committee of Creditors and subsequently confirmed by the National Company Law Tribunal (NCLT), Kolkata, on 07.04.2022.

Respondent No. 1, a former minority shareholder of the corporate debtor, challenged this approval before the NCLAT by filing an appeal under Section 61 of the IBC on 23.05.2022 (e-filing) and 24.05.2022 (physical filing). This appeal was accompanied by an application seeking condonation of a 15-day delay. The NCLAT condoned the delay, leading to the present appeal before the Court.

Issues Before the Court

1. Whether the appeal filed by Respondent No. 1 was within the limitation and condonable period under Section 61(2) of the IBC.
   
2. Whether NCLAT had the power to condone a delay beyond the permissible statutory limit.
   

Arguments by Tata Steel (Appellant)

• The appeal was filed beyond the 45-day maximum period (30 days + 15 days grace) as prescribed by Section 61(2) of IBC.
  
• The last date for filing the appeal, 07.05.2022, was a working Saturday for the NCLAT registry; thus, Section 4 of the Limitation Act could not be invoked.
  
• The NCLAT miscalculated the limitation by treating 09.05.2022 as the expiry of the 30-day period and wrongly condoned the appeal filed on 24.05.2022.
  
• Cited precedents included:
  
  • V. Nagarajan v. SKS Ispat (2022) 2 SCC 244
  • Kalpraj Dharamshi v. Kotak Investment Advisors (2021) 10 SCC 401
  • Ajay Gupta v. Raju (2016) 14 SCC 314

Arguments by Respondent No. 1

• Claimed that the 30-day limitation began only on 08.04.2022, when stock exchange disclosures were made—asserting this was the first date of knowledge of the resolution plan.
  
• Argued benefit under Section 4 of the Limitation Act, as 08.05.2022 (30th day) was a Sunday.
  
• Maintained that the 15-day condonable period extended the timeline to 24.05.2022, within which the appeal was filed.
  
• Highlighted lack of access to documents and non-compliance by the Resolution Professional with SEBI disclosure norms, which contributed to the delay.
  

Court’s Reasoning

The Court adopted a strict construction of limitation provisions under the IBC:

• It affirmed that the limitation period under Section 61(2) of the IBC runs from the date of the NCLT’s pronouncement—not from the date of disclosure or party’s knowledge (V. Nagarajan principle).
  
• Section 4 of the Limitation Act can apply only within the “prescribed period” (i.e., the initial 30 days), not the condonable 15-day extension.
  
• As 07.05.2022 was a working day, Respondent No. 1 was not entitled to invoke Section 4 of the Limitation Act.
  
• The appeal was thus filed on the 47th day, beyond the maximum permissible period of 45 days.
  
• Emphasised that NCLAT’s jurisdiction to condone delay ends strictly at 15 days post the 30-day window (Kalpraj Dharamshi, My Preferred Transformation v. Faridabad Implements 2025 SCC OnLine SC 70).
  

Key Case Laws Relied Upon

1. V. Nagarajan v. SKS Ispat & Power Ltd. – Clarified limitation begins on the date of pronouncement, not availability of order.
   
2. Kalpraj Dharamshi v. Kotak Investment Advisors – NCLAT cannot condone delay beyond 15 days after 30-day limit.
   
3. Assam Urban Water Supply v. Subash Projects – Section 4 of Limitation Act applies only to “prescribed period.”
   
4. My Preferred Transformation v. Faridabad Implements – Reaffirmed limited applicability of Section 4 to IBC timelines.
   
5. Bhimashankar SSK v. Walchandnagar Industries – Delay beyond grace period cannot be condoned, even if last day was court holiday.
   

Final Verdict

The Court allowed the appeal filed by Tata Steel Ltd., holding that:

• The appeal by Respondent No. 1 before NCLAT was time-barred.
  
• NCLAT had no authority to condone delay beyond the statutorily permitted 45 days.
  
• The impugned NCLAT order dated 14.12.2022 was ultra vires and set aside.

FAQs:

1. What is the time limit to file an appeal with the NCLAT in an insolvency case under the IBC?

If you want to appeal an order from the National Company Law Tribunal (NCLT) in a case under the Insolvency and Bankruptcy Code (IBC), you must file your appeal with the National Company Law Appellate Tribunal (NCLAT) within 30 days from the date of the order. This is a strict deadline set by Section 61(2) of the IBC.

2. Can the NCLAT excuse a delay if I miss the 30-day deadline for filing an insolvency appeal?

Yes, the NCLAT can excuse a delay in filing an appeal, but only for a very limited period. If you can show there was a “sufficient cause” for not filing within the initial 30 days, the NCLAT has the power to allow an appeal filed within an additional 15 days. This means the NCLAT can only excuse a delay of up to 15 days beyond the original 30-day deadline, making the absolute maximum period 45 days from the date of the NCLT order.

3. Does the general law that allows courts to excuse delays (Section 5 of the Limitation Act) apply to insolvency appeals before the NCLAT?

No, Section 5 of the Limitation Act, 1963, which gives courts general power to condone delays if “sufficient cause” is shown, does not apply to appeals filed under Section 61 of the Insolvency and Bankruptcy Code (IBC). The IBC is a special law with its own specific provisions for timelines, and these override the general provisions of the Limitation Act. The NCLAT’s power to condone delay in IBC appeals is strictly limited to the 15 days explicitly mentioned in Section 61(2) of the IBC.

4. Why are the deadlines for filing appeals in insolvency cases under the IBC so strict?

The Insolvency and Bankruptcy Code (IBC) is designed to resolve insolvency cases quickly and efficiently. Strict timelines are a core feature of the IBC to ensure certainty and prevent delays in the insolvency resolution process. The legislative intent is to ensure that these matters are concluded in a time-bound manner, and allowing extensions beyond the statutorily prescribed limits would undermine this objective. Time is considered of the essence in these statutory appeals.

5. What is the consequence if the NCLAT excuses a delay in an insolvency appeal beyond the maximum 45-day period allowed by the IBC?

If the NCLAT condones a delay beyond the total period of 45 days (30 days plus the additional 15 days for sufficient cause) allowed under Section 61(2) of the Insolvency and Bankruptcy Code, such an order would be considered “ultra vires” – meaning beyond its legal power and authority. The NCLAT has no power to condone delays beyond the period stipulated in the statute. Therefore, an order condoning delay beyond this limit can be set aside.

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