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V Nagarajan v. SKS Ispat and Power Ltd. & Ors.

Civil Appeal · 2021 INSC 663Decided 22 Oct 2021
Civil Appeal No. 3327 of 2020
Dr. Justice D.Y. Chandrachud · Justice Vikram Nath · Justice B.V. Nagarathna

Background

V Nagarajan, the liquidator of Cethar Ltd. (a company in liquidation), had sought to restrain Respondent No. 10 from invoking a bank guarantee against the corporate debtor. The National Company Law Tribunal (NCLT), Chennai, dismissed this application on 31 December 2019, and the appellant was present in court when the order was pronounced. He did not apply for a certified copy, and instead waited for the order to be uploaded online (which happened only in March 2020) before filing an appeal before the National Company Law Appellate Tribunal (NCLAT) on 8 June 2020. The NCLAT dismissed the appeal as time-barred under Section 61 of the Insolvency and Bankruptcy Code (IBC), which requires appeals within 30 days (extendable by 15 days), and the liquidator appealed to the Supreme Court.

Decision Breakdown

The Supreme Court held that, unlike Section 421(3) of the Companies Act (which runs limitation from when a copy is "made available" to the aggrieved party), Section 61(2) of the IBC deliberately omits that language, reflecting the legislature's intent that IBC litigants must act with diligence given the Code's emphasis on speed. A person aggrieved by an NCLT order must apply for a certified copy promptly; only the time taken by the court to furnish that copy (after an application is made) is excluded from the limitation clock under Section 12 of the Limitation Act: a party cannot simply wait indefinitely for a free copy to be uploaded or issued. Since the appellant never applied for a certified copy and relied only on a downloaded online copy uploaded months later, his appeal was correctly held to be time-barred by the NCLAT, and the Supreme Court dismissed the civil appeal.

Lesson Learnt

In time-sensitive statutory regimes like the IBC, a litigant who is present when an order is pronounced must proactively apply for a certified copy to start/stop the limitation clock in their favour: passively waiting for a free copy to be uploaded or issued can cause an appeal right to lapse completely, since courts have no power to condone delay beyond the statute's fixed outer limit.

Official source (sci.gov.in)View Judgment (PDF)

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