NCLAT: Substituting Impugned Order While Refiling Appeal Shows Lack of Bonafide; Delay Beyond 45 Days Not Condonable
Pranav B Prem
The National Company Law Appellate Tribunal (NCLAT), New Delhi, has held that when a litigant refiles an appeal after curing defects and challenges a fresh and distinct order not previously appealed, such conduct cannot be regarded as bona fide. Consequently, the benefit under Section 14 of the Limitation Act, 1963 for exclusion of the period spent in pursuing the earlier proceeding cannot be granted. The Tribunal clarified that once the statutory maximum time limit of 45 days (30 days + 15 days condonable period) under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 expires, it has no authority to entertain the appeal.
The decision was rendered by the Bench comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member) in Interlocutory Application No. 384 of 2024 in Company Appeal (AT) (Insolvency) No. 91 of 2024, filed by the Appellant seeking condonation of a 117-day delay in filing an appeal against the NCLT order dated 02.08.2024.
Background of the Case
The Appellant had initially filed an appeal on 02.08.2024, challenging the orders dated 29.07.2024 and 30.07.2024 passed by the Adjudicating Authority (NCLT), Mumbai Bench. However, that appeal was returned by the Registry with defects. After curing the defects, the Appellant re-submitted the appeal on 26.11.2024, but now challenging a new order dated 02.08.2024, instead of the earlier two orders. It was argued that this substitution of the impugned order occurred within the same appeal re-filing process and hence the time between 02.08.2024 and 26.11.2024 should be excluded by applying Section 14 of the Limitation Act. The Appellant contended that the earlier appeal was prosecuted in good faith and due diligence, but due to misjoinder of cause of action, liberty was granted to file a fresh appeal. Hence, the present appeal filed on 26.11.2024 was within time if the earlier period is excluded.
Tribunal’s Analysis
The Bench categorically rejected this argument. It held that the order dated 02.08.2024 was clearly available to the Appellant from the date of pronouncement and was distinct from the orders earlier challenged. The limitation for filing the appeal began on 02.08.2024 and expired on 01.09.2024, with an additional 15 days’ condonable period expiring on 16.09.2024. Since the appeal was filed only on 26.11.2024, it was beyond the maximum period prescribed under the statute.
The Tribunal emphasized that to invoke Section 14 of the Limitation Act, the party must demonstrate that the earlier proceedings were being prosecuted with due diligence and in good faith. It observed: “To claim benefit under Section 14, it is necessary for the Appellant to establish that the earlier proceedings were being pursued in good faith and with due diligence. In the present case, both elements are absent.”
It further remarked that curing defects does not permit a party to substitute or change the order under challenge. The original appeal had been filed against two different orders, and upon re-filing, the Appellant changed the cause of action entirely by now challenging a new order dated 02.08.2024. This act was seen as an afterthought and an attempt to bypass the limitation.
The Tribunal also referred to the Supreme Court’s judgment in Tata Steel Ltd. v. Rajiv Kumar [Civil Appeal No.408 of 2023], which held that NCLAT has no jurisdiction to condone delay beyond 15 days after the 30-day period, under Section 61(2) of the IBC. Accordingly, even if Section 14 could apply—which it did not—the Tribunal lacked the power to admit the appeal after the total 45-day period.
The Bench observed: “Neither there was any bona fide, nor it can be said that Appellant acted diligently. The delay is said to be of 117 days and the present is a case where the Appellant is clearly not entitled to the benefit of Section 14 of the Limitation Act.”
In conclusion, the Tribunal held that the Appellant had failed to establish either bona fide intent or due diligence in pursuing the earlier appeal. The substitution of the challenged order during the curing of defects indicated lack of good faith. As the appeal was filed far beyond the permitted statutory period, and no legal ground existed for exclusion of time, the application for condonation of delay was dismissed.
Appearance
For Appellant: Mr. Neeraj Gupta, Ms. Shubhangini Yadav, Mr. Shashank Raghav and Mr. Ankur Saraswat, Advocates
For Respondent: Ms. Honey Satpal and Mr. Kanishk Kullar, Advocates.
Cause Title: Unified Titanium Common Association Through Authorized Representative V. Earth Iconic Infrastructures Pvt. Ltd. Through Liquidator
Case No: Company Appeal (AT) (Insolvency) No. 250 of 2025 & I.A. No. 959 of 2025
Coram: Justice Ashok Bhushan [Judicial Member], Mr. Barun Mitra [Technical Member], Mr. Arun Baroka [Technical Member]
