Condonation of delay by NCLAT | Free & paid certified copy of final orders are on the same footing as per Rule 50 of NCLT Rules: SC

Supreme Court: While deliberating over the instant appeal revolving around the interpretation of Rule 50 of National Company Law Tribunal Rules, 2016 (NCLT Rules) and Rule 22 of National Company Law Appellate Tribunal Rules, 2016 (NCLAT Rules); the Division Bench of D.Y. Chandrachud, CJ., and Manoj Misra, JJ., clarified and held that the provisions of Rule 50 of the NCLT Rules, place both the free certified copy of NCLT’s final order as well as the certified copy which is applied for on payment of fees, on the same footing.

Background and Contentions:

SBI instituted an application under Section 7 of the Insolvency and Bankruptcy Code 2016, against IPCL. NCLT at Hyderabad rejected the petition on the ground of maintainability by an order dated 30-10-2023. The appeal before the NCLAT, Chennai was filed on 2-12-2023. The appellant filed an application for condonation of delay on the ground that the appeal had been lodged with a delay of 3 days beyond the 30-day period prescribed in Section 61(2) of IBC, 2016.

There was a split decision between the Judicial and Technical Members of NCLAT in the matter. As per the Judicial Member, the certified copy which was filed by SBI was a “free of cost” copy and hence in the absence of an application for the grant of a certified copy, the delay of 3 days could not be condoned.

Meanwhile, the Technical Member held that no distinction could be made between certified copies obtained through the payment of fee and a free copy and sufficient cause was shown for condoning the delay of 3 days.

The divergence was, thereafter, referred to a third Member of the NCLAT who held that the free copy provided under Rule 50 of NCLT Rules cannot be treated as a certified copy which is referred to in Rule 22(2) of NCLAT Rules.

Counsel for SBI contended that Rule 50 of the NCLT Rules places both the certified copy which is provided free of cost as well as the certified copy which is made available against the payment of costs as indicated in the Schedule of Fees on the same footing. It was urged that as a matter of fact, the free certified copy was made available on 14-11-2023 and the appeal which was filed on 2 —12-2023 was well within the condonable period of 15 days beyond the period of 30 days which is stipulated in Section 61(2), IBC.

Court’s Assessment:

Perusing the facts and contentions raised by the parties, the Court distinguished the facts of the instant case with that of V. Nagarajan v. SKS Ispat and Power Limited, (2022) 2 SCC 244.

The Court observed that in V. Nagarajan (supra) the order of the NCLT was dated 31-12-2019 and was uploaded on the website on 12-03-2020. Further, there was a correction in the name of the Judicial Member who passed the order on 20-3-2020. The Supreme Court had held that both the certified copy which is made available free of cost as well as the certified copy, which is made available on the payment of costs, are treated as certified copies for the purpose of Rule 50. 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 Court noted that in the instant case, the free copy of the NCLT order was made available on 14-11-2023 after the decision of the NCLT was pronounced on 30-10-2023. The appeal was lodged on 2-12-2023. The appeal was lodged with a delay of only 3 days beyond the statutory period of 30 days and, therefore, fell within the condonable period of 15 days. Sufficient cause was shown for condoning the delay of three days.

The Court further pointed out that Entry 31 of Schedule of Fees prescribed by the NCLT Rules 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 Rs 5 per page. The stipulation of Rupees five per page in Entry 31 excludes “the concerned parties under Rule 50”.

Therefore, with the afore-stated assessment, the Court thus allowed the appeal and set aside the impugned judgment and order of the NCLAT dated 7-5-2024. The delay of 3 days in filing the appeal was condoned and the Court directed that the appeal be restored to the file of NCLAT.