V Nagarajan vs SKS Ispat and Power Ltd.& Ors.
Case Number: Civil Appeal No(s). 3327 of 2020
Judges Name: Hon’ble Judges Dr Dhananjaya Y Chandrachud J, Vikram Nath J, BV Nagarathna J
Order dated: 22.10.2021
Facts of the Case:
This appeal is preferred by the Liquidator of Cethar Ltd (Corporate Debtor) against the order of the Hon’ble National Company Law Appellate Tribunal (NCLAT). The Appellant filed an application before the Hon’ble National Company Law Tribunal, Chennai Bench (NCLT) seeking an injunction against the SKS Power Generation Chhattisgarh Ltd (Respondent No.10) from invoking certain bank guarantees issued by the Corporate Debtor. The NCLT held that the performance guarantees were not a part of security interest as per Section 3(31) of the Insolvency and Bankruptcy Code, 2016 (IBC) and dismissed the application on 31.03.2019. The Appellant preferred on appeal before NCLAT nearly five months after the NCLT’s order without a certified copy of the NCLT’s order. The appellant cited that order was uploaded on NCLT’s website only on 12.03.2020 and was unable to procure the certified copy due to COVID-19. The NCLAT dismissed the appeal as time barred. Thus, the Appellant has approached the Hon’ble Supreme Court.
The Hon’ble Supreme Court observed/held as follows:
- The law on limitation with respect to the IBC is settled and emphatic in its denunciation of delays as IBC is a watershed legislation which seeks to overhaul the previous bankruptcy regime which was afflicted by delays and indefinite legal proceedings.
- The words “from the date on which the order is made available” which is present is Section 421(3) of the Companies Act, 1956 is absent from Section 61(2) of IBC and it is not a mere omission and it signals the intention of the legislature for parties to be proactive and facilitate timely resolution.
- Rule 14 of the NCLAT Rules empowers the NCLAT to exempt parties from compliance with the requirement of any of the rules but the same is not an automatic right. It cannot be used to negate Rule 22 of the NCLAT Rules which requires the certified copy of the order to be attached.
- The period of limitation for filing an appeal under Section 61(1) of IBC starts to run from the date on which the order is made.
- The Court is not empowered to condone delays beyond statutory prescriptions in special statutes containing a provision for limitation.
The Hon’ble Supreme Court dismissed the Appeal.