Supreme Court Reiterates Strict Limitation Framework Under IBC: No Condonation Beyond 45 Days for Appeals Before NCLAT

Introduction

The Hon’ble Supreme Court has, in Tata Steel Ltd. v. Raj Kumar Banerjee & Ors. (2025)[i], adjudicated upon two issues wherein firstly, they determined whether the National Company Law Appellate Tribunal (‘NCLAT’) is vested with the jurisdiction to condone a delay in the filing of an appeal under s. 61(2) of the Insolvency and Bankruptcy Code, 2016 (‘Code’), beyond the statutorily mandated period, and secondly, when does the period of limitation deem to commence in respect of a person who was not impleaded as a party to the original proceedings initiated under the Code. Through the present judgment, the Court has reiterated and emphasized the strict application of limitation periods under the Code and the scope of s. 4 of the Limitation Act, 1963 (‘ Limitation Act’), in respect of the tribunal working days.

Brief Facts

• In the present case, Tata Steel Ltd. (‘Appellant’) emerged as the successful resolution applicant for Rohit Ferro-Tech Ltd., the corporate debtor (‘CD’) in insolvency proceedings. Raj Kumar Banerjee (‘Respondent’), a former minority shareholder of the CD and not a party to the original insolvency process, challenged the resolution plan post-approval.

• The National Company Law Tribunal (‘NCLT’) approved the Appellant’s resolution plan on 07.04.2022. However, the Respondent contended that he had become aware of the resolution plan only on 08.04.2022, through a disclosure made before the stock exchange.

• Subsequently, the Respondent filed an appeal before the NCLAT on 23.05.2022, under s. 61 of the Code, along with an application seeking condonation of delay. Such appeal was initially e-filed on the aforementioned date, and thereafter, on 24.05.2022, it was physically filed.

• The NCLAT proceeded to condone the delay and allowed the application filed by the Respondent. While passing the Impugned Order, the NCLAT relied upon the provisions mentioned in s. 4 of the Limitation Act, whereby, in a scenario wherein the prescribed period was expiring on the day when the relevant court was closed, an application could be filed on the next working day. Relying upon the aforementioned provision, the NCLAT observed that since the limitation period in the Respondent’s case coincided with a Saturday, which was a court holiday, the condonation was allowed.

• Aggrieved by the passing of the Impugned order, the Appellant approached the Court, contending that the appeal was time-barred and that the order passed by NCLAT was erroneous and legally unsustainable.

Issue

1. Whether the appeal filed by the Respondent was within the prescribed limitation period of 30 days, along with the additional condonable period of 15 days as provided under s. 61(2) the Code; and

2. If not, whether the NCLAT has the power to condone the delay beyond the said prescribed and condonable period under the Code.

Held

• The Court, while answering the first issue, placed reliance on the case of V. Nagarajan v. SKS Ispat & Power Limited (2022)[ii], wherein it was held that the limitation period prescribed under s. 61(2) of the Code commences from the date of pronouncement of the NCLT order, irrespective of the date of knowledge or disclosure, even in the case where non-party to the proceedings are involved.

• In the present case, the Respondent was neither a party to the NCLT proceedings nor privy to deliberations made by the Committee of Creditors. Further, the Respondent had also submitted that he learned about the passing of the order only later. However, considering that the CD’s Company Secretary had promptly informed the stock exchanges about the order dated 07.04.2022, within 30 minutes of its pronouncement, the Court observed that the limitation period in the present case commenced on 07.04.2022 itself and consequently, it expired on 07.05.2022, which was a working Saturday for the NCLAT Registry. Thus, the appeal, filed by the Respondent on 23.05.2022, was filed beyond both the prescribed 30-day period and the additional 15-day condonable period. Consequently, the provisions of s. 4 of the Limitation Act and Rule 3 of the NCLAT Rules, 2016 were held to be inapplicable.

• Further, to adjudicate upon the second issue, the Court relied upon Kalpraj Dharamshi v. Kotak Investment Advisors (2021)[iii], wherein it was held that the total permissible period for filing an appeal is 45 days (30 days + 15 days condonable) and the NCLAT had no power to condone any delay beyond the period stipulated under the statute.

• In view of the aforementioned observations, the Court allowed the Appellant’s appeal, and set aside the Impugned Order, holding the Respondent’s appeal as barred by limitation.

Our Analysis

The  Supreme Court has reaffirmed the rigid and inflexible nature of the limitation period under s. 61(2) of the Code, emphasizing that the 45-day period begins strictly from the date of pronouncement of the NCLT order, irrespective of the date of knowledge or disclosure, even for non-parties. The Court emphasized that this limitation framework is integral to the Code’s objective of ensuring finality, commercial certainty, and the speedy resolution of insolvency proceedings. It further clarified that s. 4 of the Limitation Act, which allows for an extension when the court is closed, is inapplicable if the registry is open. The exemption under s. 4 thus only envisages a scenario wherein no filing-related activity is possible, not merely when courts are not in session. However, the registry continues to work, which was the scenario in the present case. The ruling thus reinforces the narrow scope for condonation, especially in proceedings initiated under the Code, which is purposefully designed to ensure the timely resolution of insolvency proceedings initiated thereinunder.

While this approach promotes procedural efficiency and decisiveness, it simultaneously underscores the need for robust disclosure mechanisms and proactive vigilance among all stakeholders to safeguard the interests of non-parties.

End Notes

[i] 2025 SCC OnLine SC 1042.

[ii] (2022) 2 SCC 244.

[iii] (2021) 10 SCC 401.

Authored by Arjun Singh Tamang, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinions.