The Supreme Court recently interpreted the rules regarding the filing of appeals and the treatment of certified copies under the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal Rules. The ruling clarified that both free and paid copies are treated the same for the purposes of limitation, thereby allowing the appeal to proceed despite the initial delay in filing.
Certified vs free debate received a split verdict before NCLAT
In the present case, the State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code 2016, against India Power Corporation Limited. The National Company Law Tribunal (NCLT) at Hyderabad had earlier dismissed the petition on grounds of maintainability on October 30, 2023. The appeal before NCLAT was filed on December 2, 2023, with a delay of three days beyond the 30- day period stipulated under Section 61(2) of Insolvency and Bankruptcy Code. A split verdict on the treatment of free copies for the purpose of condonation of delay resulted in referral of the case before a Third Member of NCLAT, who dismissed the appeal saying that the free copy provided under Rule 50 of said Rules could not be treated as a certified copy under 22(2) of the National Company Law Appellate Rules, 2016.
Relaxed legislative Intent vs strict interpretation
Appellant's counsel, Ms Surbhi Khattar asserted that the appeal was filed within the condonable period of 15 days beyond the initial 30 day period mentioned under section 61(2) of IBC. The delay of three days in filling the appeal should be condoned as sufficient cause was shown argued the appellants. Reference was also made to previous judgements, including the decision in V Nagarajan, to support the position that litigants should not be penalised for procedural delays when they have acted in good faith and within the framework of the law. On the other side, the respondents emphaisised on a strict interpretation of law and argued that the NCLAT's decision to dismiss the appeal on grounds of delay was justified. Dr Abhishek Manu Singhvi representing the appellant said that allowing the appeal would undermine the procedural integrity of the appellate process. The respondents also pointed to the split verdict within NCLAT, highlighting the Judicial Member's stance that the application for a certified copy precluded the condonation of delay. The argued that this interpretation should be upheld to maintain consistency in the application of law.
Litigant cannot be penalised for procedural nuances says SC
The Supreme Court, upon hearing the arguments, noted that both the free certified copy and the certified copy obtained through payment are treated equally under law. The Court allowed the appeal and said that there should be no distinction between the two types of certified copies when it comes to the computation of limitation periods for filling appeals.
By way of the said judgement, the Supreme Court after analysing the NCLT Rules and NCLAT Rules, has answered the aforesaid question in affirmative and held as follows:
(i) Rule 50 of the NCLT Rules prescribes that the Registry shall send a certified copy of the final order free of cost and certified copies may be made available on payment of costs in terms of the Schedule of Fees in all other cases.
(ii) A Schedule of Fees is prescribed by the NCLT Rules. Entry 31 of the Schedule stipulates that the fee for obtaining true certified copies of final orders passed to parties other than the concerned parties under Rule 50 shall be Rupees five per page. The stipulation of Rupees five per page in Entry 31 excludes “the concerned parties under Rule 50”
(iii) The provisions of Rule 50 of the NCLT Rules place both the free certified copy as well as the certified copy which is applied for on payment of fees on the same footing.
(iv) A litigant who does not apply for a certified copy cannot then fall back and claim that he was awaiting the grant of a free copy to obviate the bar of limitation.
The Civil Appeal was filed on behalf of SBI represented by Solicitor General of India, Tushar Mehta along with the Cyril Amarchand Mangaldas Team comprising of Madhav Kanoria, Partner; Surabhi Khattar, Partner; Neha Shivhare, Senior Associate and Sriharsh Raj, Associate. Submissions on behalf of Appellant were addressed by Mr. Tushar Mehta and Ms Surabhi Khattar.
Additionally, IPCL was represented by Dr. Abhishek Manu Singhvi.
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