Overview:
The timeframe specified in Section 61 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) comprising 30 days plus an additional 15 days (including the outer limit) is mandatory, and any subsequent delay cannot be excused through judicial discretion. By virtue of IBC being a specialized statute, Section 5 of The Limitation Act, 1963 (“Limitation Act”), which allows for extensions in certain cases, does not apply to it.
Chandy John Samuel V. Piramal Capital & Housing Finance Limited & Anr. (Company Appeal (AT) (CH) (Ins) No.138/2024)
Technical Details:
1) The Appellant had filed the Appeal with an application seeking condonation of delay (“Application”) of 35 days (after the expiry of 30-day limitation period) claiming sufficient cause due to a personal emergency.
2) The National Company Law Appellate Tribunal (“NCLAT”) dismissed the Application and by virtue of dismissal of the Application and the Appeal on the following grounds:
(a) Section 61 (2) of the IBC is clear and explicit to state that the statutory limit of filing the Appeal within 30 days can only be condoned for a maximum period of 15 days. The same computes to a total of 45 days, which is to be treated as the outer limit, accordingly, a delay cannot be condoned for more than 15 days even after sufficient cause is exhibited.
(b) Section 5 of the Limitation Act is not applicable on the IBC and will not override the timelines prescribed under Section 61 of the IBC, by virtue of the IBC being a special statute.
(c) The NCLAT does not have the power to condone the delay beyond the outer limit granted by the IBC and is bound by the time limit prescribed under the same.
JC Key Takeaways:
1) IBC is considered a special statute, as a result, section 5 of the Limitation Act does not apply to the IBC and does not supersede the timelines set forth in Section 61 of the IBC.
2) The timelines outlined in Section 61 of the IBC are strict and mandatory. The Tribunal lacks the authority to excuse delays based on judicial discretion.
For further details, please see:
https://www.juriscorp.in/wp-content/uploads/Data upload/Judgment – FYI.pdf
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