NCLAT refers refiling of appeal under IBC and Companies Act to a larger bench

NCLAT refers refiling of appeal under IBC and Companies Act to a larger bench

Maintains that earlier judgments needed reconsideration

The National Company Law Appellate Tribunal (NCLAT) has observed that the issue of delay in the refiling of appeal is often coming for consideration before it.

The principal bench of NCLAT comprising Justice Ashok Bhushan (chairperson), Justice N Satyanarayana Murthy (judicial member), and Barun Mitra (technical member), was adjudicating an appeal filed in the V R Ashok Rao vs TDT Copper Limited case.

Referring to a larger bench, it questioned, 'Whether limitation for filing an appeal before NCLAT also governs the period for curing a defect in the appeal? Also, does NCLAT have the jurisdiction to condone the delay in the refiling of the appeal if it is beyond the limitation prescribed under the Insolvency and Bankruptcy Code (IBC) or the Companies Act, 2013?'

The appellant had filed an appeal before the NCLAT under the Insolvency and Bankruptcy Code (IBC), 2016 against the March 2022 order passed by the New Delhi Bench of the National Company Law Tribunal (NCLT).

The Memo of Appeal was presented in the NCLAT office in April. After scrutiny of the appeal, the defects were intimated to the appellant. The appellant refilled the appeal in June, there being a delay of 43 days in refiling it.

The Registrar of NCLAT vide its July office note, placed the matter before the NCLAT under the heading 'for admission (fresh cases) with defects.'

The appellant submitted that the refiling delay of 43 days may be condoned, and the appeal be heard on merits. The limitation for filing an appeal under IBC is 30 days. An application for condonation of delay of two days in filing the appeal was mentioned along with the appeal.

On the other hand, the respondent submitted that refiling delay did not deserve to be condoned as it would be treated as a fresh filing of the appeal and the same was beyond 45 days from the date of the impugned order. Thus, neither the delay in filing nor the delay in refiling the appeal was to be condoned.

Under the NCLAT Rules, 2016, only 7 days' time is allowed to remove the defects, which was communicated to the appellant in April. But the removal of the defect appeal was refiled in June. Hence, the registration of the appeal should be refused.

Relying on the earlier judgments of the Supreme Court and NCLAT, the bench observed that the issue of delay in refiling was often coming before NCLAT for consideration. It maintained that the earlier judgments of NCLAT needed to be reconsidered for an authoritative pronouncement on the issue.