TATA STEEL LTD VS RAJ KUMAR BANNERJEE:CASE SUMMARY

The Hon’ble Supreme Court held in Tata Steel Ltd. Vs. Raj Kumar Bannerjee ( Civil Appeal No. 408/2023)  that time is of the essence in statutory appeals, and the prescribed limitation period must be strictly adhered to.

FACTS OF THE CASE

Respondent No. 1 filed an appeal before  Hon’ble NCLAT  under Section 61 IBC to set aside order dated 07.04.2022 passed by Adjudicating Authority approving the Resolution Plan.  An application for condonation of delay of 15 days was also filed. The Appellant filed e-appeal on 23.05.2022 and physical filing was done on 24.05.2022.  NCLAT allowed the appeal. The Appellant approached he Supreme Court against the order of NCLAT.

The Supreme Court was dealing with two issues :

(i) Whether the appeal filed by Respondent No. 1 was within the prescribed limitation period of 30 days, along with the additional condonable period of 15 days as provided under section 61(2) IBC ?

(ii)  If not, whether the NCLAT has the power to condone the delay beyond the said prescribed and condonable period under the IBC ?

FINDINGS OF THE COURT

(i) Whether the appeal filed by Respondent No. 1 was within the prescribed limitation period of 30 days, along with the additional condonable period of 15 days as provided under section 61(2) IBC ?

The Supreme Court noted that the total permissible period for filing an appeal under Section 61 (2) IBC is 45 days- comprising 30 days as prescribed period and an additional 15 days that may be condoned upon showing sufficient cause.

The Respondent No. 1 claimed that although the Resolution Plan was approved by the NCLT on 07.04.2022,  he came to know about the order on 08.04.2022. 30 days period was to expire on 08.05.2022 however 08.05.2022 being Sunday, the prescribed period was extended to next working day on 09.05.2022. Thereafter, the additional grace period of 15 days for seeking of condonation of delay expired on 24.05.2022. E-filing was done on 23.05.2022 and physical filing was done on 24.05.2025 as such it was claimed by the Respondent No. 1 that filing was filed within 45 days.

The Supreme Court observed that benefit of exclusion of period during which the court is closed shall be available when the application is filed within “prescribed period of limitation” and shall not be available in respect of period extendable by court in exercise of its discretion.

The Supreme Court  relying on  Rajendra Vs. Gonugunta Madhusudan Rao noted that where judgment is pronounced in open court, the limitation starts running from that very day.

The Supreme Court observed that limitation started running on 07.04.2022. 30 days was completed on 07.05.2022, which fell on first working Saturday. Even otherwise, the benefit of section 4 of the Limitation Act, 1963 cannot be granted, as Respondent No. 1 filed the appeal beyond not only the prescribed period of 30 days but also the condonable period of 15 days, i.e., on 24.05.2022. In view of the same reason, Rule 3 of the NCLAT Rules, 2016 has also no application to the facts of the present case.

The Supreme Court concluded that the Appeal has been filed beyond 45 days.

(ii) If not, whether the NCLAT has the power to condone the delay beyond the said prescribed and condonable period under the IBC ?

The Supreme Court noted that Section 61 (2) clearly limits the NCLAT’s jurisdiction to condone delay only up to 15 days beyond the initial 30-days period. Where a statute expressly limits the period within which delay may be condoned, an Appellate Tribunal cannot exceed that limit. The NCLAT being a creature of statute, operates strictly within the power’s conferred upon it. Unlike civil suit, it lacks inherent jurisdiction to extend time on equitable grounds.

The Supreme Court observed that time is of the essence in statutory appeals, and the prescribed limitation period must be strictly adhered to. Even a delay of a single day is fatal if the statute does not provide for its condonation.

The Supreme Court set aside order dated 07.04.2022 passed by Hon’ble NCLAT.

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