{"id":307473,"date":"2023-11-20T11:00:38","date_gmt":"2023-11-20T05:30:38","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=307473"},"modified":"2023-11-24T12:11:15","modified_gmt":"2023-11-24T06:41:15","slug":"period-of-limitation-for-appeals-starts-from-date-of-rectification-order-when-merged-with-original-order-nclat-scc-blog","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/11\/20\/period-of-limitation-for-appeals-starts-from-date-of-rectification-order-when-merged-with-original-order-nclat-scc-blog\/","title":{"rendered":"Limitation period for appeals starts from date of Rectification Order when merged with Original Order: NCLAT"},"content":{"rendered":"
\n

National Company Law Appellate Tribunal, New Delhi:<\/span> In an appeal challenging the dismissal of an application on the grounds of being not maintainable under Section 10-A<\/a> of the Insolvency and Bankruptcy Code, 2016<\/a> (IBC) and subsequently, a rectification application, a Division bench comprising of Anant Bijay Singh, J., and Mr. Ajai Das Mehrotra (Technical Member), ruled in favor of the appellant, emphasizing the exclusion of the period taken for obtaining the certified copy, deeming the appeal timely. The NCLAT remitted the matter to the Adjudicating Authority for expedited consideration of the application under Section 7, treating it as outside the scope of Section 10-A<\/a> of the IBC<\/a>.<\/p>\n

Factual Matix<\/p>\n

In the instant matter, the appellant preferred an appeal, under Section 61<\/a> of the Insolvency and Bankruptcy Code, 2016<\/a> (IBC), challenging the impugned order dated 21-03-2023, as well as the order dated 17-01-2023, both issued by the NCLT, Mumbai Bench.<\/p>\n

The Adjudicating Authority dismissed the appellant’s application as not maintainable under Section 10-A<\/a> of the IBC<\/a>, 2016, on 17-01-2023. On 15-02-2023, the appellant filed for rectification of the order dated 17-01-2023, which was partly allowed on 21-03-2023.<\/p>\n

Parties’ Contentions<\/p>\n

The Respondent argued that the present appeal is time-barred under Section 61(2)<\/a> of the IBC<\/a> as the appeal was filed on 12-05-2023, after the expiration of the appeal period for the order dated 17-01-2023.<\/p>\n

The appellant claimed the appeal was filed within 30 days of the impugned order dated 21-03-2023, excluding the time taken for obtaining the certified copy. It was asserted that the rectification application filed on 15-02-2023, within 30 days of the order dated 17-01-2023, justified the timing of the appeal. It was argued that, as per NCLAT Rules, 2016, and Section 12<\/a> of the Limitation Act, 1963<\/a>, the period spent obtaining a certified copy should be excluded when calculating the appeal period.<\/p>\n

NCLAT’s Assessment<\/p>\n

Citing NCLAT Rules and Section 12<\/a> of the Limitation Act<\/a> and judgment in Sanket Kumar Agarwal<\/span> v. APG Logistics (P) Ltd.<\/span>, 2023 SCC OnLine SC 976<\/a>, the NCLAT affirmed the exclusion of the period spent in obtaining the certified copy. The NCLAT emphasized that pursuing rectification before filing an appeal, as per the Mohinish Kumar<\/span> v. Mohit Chawla<\/span>, 2020 SCC OnLine NCLAT 918<\/a>, was a valid approach.<\/p>\n

The NCLAT held that the appeal was timely, considering the rectification application filed within 30 days of the order dated 17-01-2023 and the exclusion of time for obtaining the certified copy. The NCLAT held that the appeal under Section 61<\/a> of the IBC<\/a> was within time, and the rectification order dated 21-03-2023 merged with the original order dated 17-01-2023.<\/p>\n

While addressing the substantive matter, i.e., determining the date of default and whether it falls within the prohibited period under Section 10-A<\/a> of the IBC<\/a>, the NCLAT observed that the Guarantor’s liability is disputed, and emphasized on invoking the guarantee as the crucial date of default. The NCLAT held that the date of default for the Corporate Guarantor was the date of invocation of the guarantee (January 2022), falling outside the prohibited period under Section 10-A<\/a> of the IBC<\/a><\/p>\n

NCLAT’s Decision<\/p>\n

The NCLAT allowed the appeal, with directions for the Adjudicating Authority to hear and decide the Application of the Financial Creditor under Section 7, treating it as a case not covered by Section 10A, expeditiously. No order as to costs.<\/p>\n

[Ashok Tiwari<\/span> v. Tattva & Mittal Lifespaces (P) Ltd.<\/span>, 2023 SCC OnLine NCLAT 2179<\/a>, order dated 31-10-2023<\/span>]<\/p>\n

*Judgment by Ajai Das Mehrotra (Technical Member)<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case :<\/p>\n

Mr. Prasannan S. Namboodiri, Counsel for the Appellant<\/p>\n

Mr. Ravi Raghunath, Counsel for the Respondent<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The NCLAT directed the Adjudicating Authority to hear and decide the application under Section 7 of the IBC expeditiously, treating it as not covered by Section 10A of the IBC.<\/p>\n","protected":false},"author":67514,"featured_media":293392,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,11],"tags":[8991,30182,22014,26724,62846],"class_list":["post-307473","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-tribunals_commissions_regulatorybodies","tag-appeal","tag-national-company-law-appellate-tribunal","tag-nclat","tag-period-of-limitation","tag-rectification-order"],"yoast_head":"\nPeriod of limitation for appeals starts from date of Rectification Order when merged with Original Order: NCLAT | SCC Blog<\/title>\n<meta name=\"description\" content=\"NCLAT held that when rectification 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