NCLAT Rules Free Final Order Copy Not Certified For IBC Appeals

NCLAT Rules Free Final Order Copy Not Certified For IBC Appeals

The National Company Law Appellate Tribunal (NCLAT) has held that the mandatory free-of-cost copy of a final order sent to litigating parties by the National Company Law Tribunals (NCLTs) cannot be treated as ‘certified’ copies as defined under the NCLAT Rules.

Thus, such free copies cannot be used as the basis for filing an appeal before the appellate body.

In an order passed on July 9, judicial member Justice Sharad Kumar Sharma of the Chennai bench of the NCLAT laid to rest all doubts on the use of such mandatory free copies for filing of appeals in proceedings under the Insolvency and Bankruptcy Code (IBC).

Justice Sharma ruled that the NCLT Rules cannot be read independently, and when it came to the issue of certified order copies, they must be read in consonance with Section 76 of the Indian Evidence Act and the NCLAT Rules, 2016. These two provisions deal with the demand for a true or certified order copy or other public documents and the filing of an appeal before the Tribunal, respectively.

“Holding thereof, the free copy provided under Rule 50 of the NCLT Rules, 2016, cannot be treated as a certified copy referred to under Rule 22(2) of the NCLAT Rules, 2016, and the free copy will not satisfy the criteria the criteria to be a certified copy, as defined under Section 2(j) of the NCLT Rules, to be read with Section 76 of the Evidence Act. Answered accordingly,” Justice Sharma said.

Justice Sharma was appointed as the third member by NCLAT Delhi to deliver a final verdict on the issue following a split verdict from the two-member bench of NCLAT Chennai in May this year. The split verdict questioned whether the free copies of orders could serve as the basis for an appeal under the IBC.

Judicial member Justice M Venugopal asserted that regardless of whether parties received free order copies, they must adhere to Rule 50 of the NCLAT Rules, 2016, requiring them to apply for a certified copy by paying fees.

On the other hand, technical member Jatindranath Swain argued that the free certified copy should be treated equally with the certified copy obtained under Section 76 of the Indian Evidence Act for filing appeals under the IBC.

This, despite the fact that on March 15 this year, a three-member bench of the NCLAT Chennai that included both Justice Venugopal and technical member Swain, along with Justice Sharma, ruled that the 'free of cost' copy of the final order sent by the NCLT registry in compliance with NCLT Rules was not a 'certified copy' of the order for the purpose of filing an appeal.

In the current ruling, Justice Sharma highlighted that the March 15 decision of the full bench had not faced any objections or challenges from the involved parties, nor had it been overturned by the Supreme Court.

However, in a separate instance involving an appeal by the State Bank of India seeking an extension of time based on a free copy, a two-member bench expressed a differing opinion on the same matter that had already been settled by the larger bench, Justice Sharma noted.

Furthermore, Justice Sharma pointed out that the technical member who dissented in the present case had previously been part of the larger bench and had concurred with their decision at that time.

He emphasized that the technical member's stance in the current case was erroneous and misplaced.

“Even the framers of the Indian Evidence Act, at the time when they had incorporated Section 76, could not even perceive the philosophy of a Certified Free Copy, and as such, the portion as extracted above, which has been extracted to be read by the Learned Member (Technical) that the expression of words'so'' used therein, in relation to a Certified Copy, has to be read also, in relation to a Free Certified Copy, would not be acceptable, once the concept of Free Certified Copy itself was not at all persistent at the time when the Evidence Act itself was framed, providing for a Certified Copy on a demand being made and on payment of fee,” Justice Sharma said.