NCLT Ahmedabad Refuses To Condon 384-Day Delay In Filing Reply, Says Administrative Difficulties Not “Sufficient Cause” Under Section 5 of Limitation Act
Pranav B Prem
The National Company Law Tribunal (NCLT), Ahmedabad, has refused to condone a 384-day delay in filing a reply to an interlocutory application in the corporate insolvency resolution process (CIRP) of Krishna Knitwear Technology Limited, holding that reasons such as voluminous documents, change of legal counsel, and internal communication lapses cannot be treated as “sufficient cause” under Section 5 of the Limitation Act. Invoking the maxim dura lex sed lex, the Bench observed that permitting such an extraordinary delay would undermine the very object of limitation.
The matter arose in connection with transactions involving Eramus Trading Company Pvt. Ltd. and Unique Warehouse Pvt. Ltd., which were examined during CIRP based on a Chartered Accountant’s report filed by Union Bank of India on behalf of the Committee of Creditors. The report was taken on record on August 20, 2024, after which the Tribunal directed the applicants to file their replies within two weeks of receiving notice. A further 14-day extension was granted on November 11, 2024. Despite these opportunities, no reply was filed, leading the Tribunal to close their right to respond on November 29, 2024.
Seeking condonation, the applicants argued that the Search Report received in September 2024 was extensive and required scrutiny and reconciliation. They attributed the delay to a change of advocates, limited communication with previous counsel, difficulty obtaining documents, and additional time required by newly appointed counsel to examine the material. They contended that the delay was unintentional and caused by circumstances beyond their control.
The Tribunal rejected these explanations. It held that “none of the reasons pleaded demonstrate circumstances which were unavoidable or which prevented the applicants from acting with normal diligence.” Referring to the conduct of the applicants, the Bench emphasised that “despite multiple opportunities and an extended period granted, the applicants did not file even a preliminary or incomplete reply, nor sought specific directions from the tribunal for additional time.”
The Bench analysed the grounds urged—voluminous records, change in counsel, internal communication issues—and held that they were administrative in nature and did not qualify as circumstances beyond control. It observed that parties were aware of the ongoing proceedings and had adequate time to act, yet failed to demonstrate bona fide efforts to file a reply. The Tribunal noted that there was no documentary material evidencing exceptional circumstances justifying such a prolonged delay.
The Tribunal relied on the Supreme Court’s decision in Pathapati Subba Reddy (Died) By L.Rs. v. Special Deputy Collector (LA), in which the Court clarified that liberal or justice-oriented approaches cannot be invoked to dilute statutory timelines. Applying these principles, the Tribunal concluded that the applicants had not shown any “adequate and enough reason” that prevented timely filing and that condoning the delay would defeat the purpose of limitation.
Holding that the delay was inordinate and unexplained, and that the applicants failed to establish “sufficient cause” as mandated under Section 5 of the Limitation Act read with Section 60(5) of the IBC, the NCLT dismissed IA No. 1346 of 2025 and rejected the request to condone the 384-day delay. No order as to costs was made.
Appearance
For Applicants: Advocate Arjun Seth
For Respondent: Advocate Ravi Pahwa
Cause Title: Eramus Trading Company Pvt. Ltd. & Ors v. Ravi Kapoor & Ors.
Case No: IA/1346(AHM)2025 and IA/1214(AHM)2023 in CP(IB)/279(AHM)2018
Coram: Judicial Member Shammi Khan, Technical Member Sanjeev Sharma
