SANJAY PANDURANG KALATEversusVISTRA ITCL (INDIA) LIMITED AND OTHERS

                 [2023] 15 S.C.R. 313 : 2023 INSC 1063



                            CASE DETAILS

                  SANJAY PANDURANG KALATE
                                     v.
          VISTRA ITCL (INDIA) LIMITED AND OTHERS
                  (Civil Appeal Nos.7467-7468 of 2023)
                         DECEMBER 04, 2023
          [DR. DHANANJAYA Y CHANDRACHUD, CJI,
           J.B. PARDIWALA AND MANOJ MISRA, JJ.]
                             HEADNOTES
     Issue for consideration: Whether appeal instituted before the NCLAT
was within limitation. In its impugned order, the NCLAT concluded that the
appeal was barred by limitation on the ground that it was instituted beyond
the outer limit of 45 days permissible under Section 61 of the Insolvency
and Bankruptcy Code 2016.
     Insolvency and Bankruptcy Code 2016 – s.61 – The appellant filed
an interlocutory application before the NCLT alleging inter alia that
the reply to the s.7 application on behalf of the Corporate Debtor was
filed by respondent no.2 without authorization of the Board of Directors
or intimation to the appellant – On 17.05.2023, the NCLT heard the
application – The order of the NCLT was not pronounced – The order
was uploaded by the Registry of the NCLT on 30.05.2023 though the
order carries the date of 17.05.2023 – NCLT dismissed appellant’s
application – Appeal against the order was e-filed before the NCLAT –
NCLAT dismissed the application as barred by limitation – Propriety:
      Held: In the instant case, the cause list for 17.05.2023 (NCLT) placed
on record by the appellant indicates that the case was listed for admission
and not for pronouncement – Further, on a specific query of the Court, it is
not in dispute between counsel for the appellant and the respondent, that
no substantive order was passed on 17.05.2023 by the NCLT – In these
circumstances, limitation would not begin to run on 17.05.2023 which was
the date on which hearings concluded – As no order was passed before
30.05.2023, there was no occasion for the appellant to lodge an application
                                    313
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for a certified copy on 17.05.2023 – Time for filing an appeal would
commence only when the order appealed from was uploaded since prior to
that date no order was pronounced – The period of limitation began to run
on 30.05.2023 – The 30 day limitation period provided in s.61(2) of the IBC
concluded on 29.06.2023 – Though the appeal was filed beyond the period
of thirty days, it was within the condonable period of fifteen days – This
Court is of the considered view that the appeal should be restored to the
NCLAT for reconsidering whether the appellant has shown sufficient cause
for condoning the delay beyond thirty days – Therefore, the impugned order
of the NCLAT declining to condone the delay is set aside and the proceedings
are restored to the file of the NCLAT. [Paras 19 and 21]
     Limitation – What stops limitation from running, date of E-filing
of appeal or physical copy of appeal:
      Held: It was settled in Sanket Agarwal case that the date of e-filing
of the appeal and not filing of the physical copy of the appeal stops the
limitation from running. [Para 22]
       LIST OF CITATIONS AND OTHER REFERENCES
      V Nagarajan v. SKS Ispat (2022) 2 SCC 244 – held inapplicable.
    Sanket Kumar Agarwal v. APG Logistics Private Limited 2023 SCC
OnLine SC 976 – relied on.
       OTHER CASE DETAILS INCLUDING IMPUGNED
              ORDER AND APPEARANCES
     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.7467-7468
of 2023.
    From the Judgment and Order dated 14.09.2023 of the National
Company Law Appellate Tribunal, Principal Bench, New Delhi in Company
Appeal (AT) (Insolvency) No.1209 of 2023 and I.A. No.4246 of 2023.
      Appearances:
     Shyam Divan, Nakul Dewan, Sr. Advs., Sandeep S. Salunkhe, Satyajit
A Desai, Amit K. Pathak, Kiran Shinde, Siddharth Gautam, Abhinav K.
Mutyalwar, Gajanan N Tirthkar, Vijay Raj Singh Chouhan, Ms. Anagha S.
Desai, Advs. for the Appellant.
     SANJAY PANDURANG KALATE v. VISTRA ITCL (INDIA)                       315
                      LIMITED


     Dhruv Mehta, Sr. Adv., Samir Malik, Varun Kalra, Mahip Singh, Farha
Malik, M/s. D.S.K. Legal, Advs. for the Respondents.
       JUDGMENT / ORDER OF THE SUPREME COURT

                               JUDGMENT

     DR. DHANANJAYA Y CHANDRACHUD, CJI
     1. Admit.
     2. These appeals arise under Section 62 of the Insolvency and
Bankruptcy Code 20161 from a judgement dated 14 September 2023 of the
National Company Law Appellate Tribunal.2 The NCLAT dismissed the
appeal against the order of the National Company Law Tribunal, Mumbai 3
on the ground of limitation.
      3. At the outset, it is clarified that the findings in this judgement are
limited to a determination of the question of limitation. The detailed facts
and averments on the merits of the larger dispute between the parties are
not analysed in the judgment.
      4. Briefly, respondent 1, Vistra ITCL (India) Limited filed an
application under Section 7 of the IBC seeking the initiation of the Corporate
Insolvency Resolution Process4 against Evirant Developers Private Limited,
the Corporate Debtor. The appellant is a former director of the Corporate
Debtor, who alleges that the Section 7 application filed by respondent 1 is
based on collusion with the various respondents, including respondent 2
and respondent 3, who are former directors of the Corporate Debtor. The
appellant filed an interlocutory application before the NCLT alleging inter
alia that the reply to the Section 7 application on behalf of the Corporate
Debtor was filed by respondent 2 without authorization of the Board of
Directors or intimation to the appellant.



1   “IBC”
2   “NCLAT”
3   “NCLT”
4   “CIRP”
316            SUPREME COURT REPORTS                      [2023] 15 S.C.R.


      5. On 17 May 2023, the NCLT heard the application filed by the
appellant. From the submissions and on a specific query of the Court,
it appears that it is not in dispute between the counsel for the appellant
and the respondent that on 17 May 2023, the order of the NCLT was
not pronounced and no substantive order was passed. The order was
uploaded by the Registry of the NCLT on 30 May 2023 though the order
carries the date of 17 May 2023. By the order, the NCLT dismissed the
appellant’s application on the grounds that the application was filed without
authorization from the Board of Directors of the Corporate Debtor and was
prima facie frivolous, to delay the proceedings in the Section 7 application.
The appellant applied for a certified copy on 30 May 2023, which was
received on 1 June 2023. The appeal against the order was e-filed before
the NCLAT on 10 July 2023.
      6. The appellant filed an application for condonation of delay along
with the appeal. The appellant contended that (i) the appellant became aware
of the contents of the order only on 30 May 2023 and the limitation period
should run from this date; (ii) the NCLAT was closed for summer vacations
between 05 June 2023 and 02 July 2023 and this period should be excluded
from the calculation of limitation.
      7. In the background of the above events, the issue before the NCLAT
was whether the appeal was instituted within limitation. In its impugned
order, the NCLAT concluded that the appeal was barred by limitation on the
ground that it was instituted beyond the outer limit of 45 days permissible
under Section 61 of the IBC. The NCLAT relied on this Court’s decision
in V Nagarajan v. SKS Ispat5 and rejected the appellant’s contention that
the time should begin to run from 30 May 2023 – the date of upload. As
the limitation period was found to have begun on 17 May 2023,the filing of
the appeal on 10 July 2023 was held to be beyond the outer limit of 45 days
prescribed under the IBC. Further, the NCLAT rejected the contention that
the annual summer vacations from 05 June 2023 to 02 July 2023 should be
excluded as the NCLAT had issued a notification stating that the registry
would remain open and filing of appeals was permissible during the vacation.
Accordingly, the appeal was dismissed as barred by limitation.


5     (2022) 2 SCC 244
     SANJAY PANDURANG KALATE v. VISTRA ITCL (INDIA)                        317
      LIMITED [DR. DHANANJAYA Y CHANDRACHUD, CJI]


     8. Separately, it may be noted that on 19 May 2023, the NCLT allowed
respondent 1’s Section 7 application and initiated CIRP against the Corporate
Debtor. The appellant’s appeal against the order has been dismissed by the
NCLAT on 05 October 2023.
     9. The table below indicates the relevant dates:
 Date          Event
 17.05.2023    The appellant’s interlocutory application was heard by the
               NCLT. However, no order was pronounced.
 30.05.2023    The orderdismissing the above interlocutory application was
               uploaded on the website of the NCLT. However, the order
               bears the date of 17.05.2023 (date of hearing)
 30.05.2023    The appellant applied for a certified copy of the NCLT order.
 01.06.2023    The appellant received a certified copy of the NCLT Order.
 29.06.2023    30-days from the date of upload of the NCLT Order.
 10.07.2023    The appellant e-filed the appeal before the NCLAT.
   10. The right to file an appeal against an order of the NCLT before the
NCLAT arises from Section 61 of the IBC, which is in the following terms:
     “61. Appeals and appellate authority – (1) Notwithstanding anything
     to the contrary contained under the Companies Act 2013, any person
     aggrieved by the order of the Adjudicating Authority under this part
     may prefer an appeal to the National Company Law Appellate Tribunal.
     (2) Every appeal under sub-section (1) shall be filed within thirty days
     before the National Company Law Appellate Tribunal:
     Provided that the National Company Law Appellate Tribunal may
     allow an appeal to be filed after the expiry of the said period of thirty
     days if it is satisfied that there was sufficient cause for not filing the
     appeal but such period shall not exceed fifteen days.”
     Section 61(2) provides for a limitation period of thirty days. The
proviso to the section provides that the NCLAT may allow the appeal to be
filed after the expiry of the thirty-day period if it is satisfied that there was
sufficient cause for not filing the appeal, but such period shall not exceed
fifteen days. Therefore, 45 days is the outer limit within which an appeal
from an order of the NCLT may be filed before the NCLAT.
318            SUPREME COURT REPORTS                       [2023] 15 S.C.R.


     11. The table of dates in paragraph 9 above indicates that there are two
possible scenarios. If this Court holds that limitation commences from 30
May 2023, the date of e-filing of the appeal will fall within the condonable
period of 15 days. Alternatively, if limitation is held to commence from 17
May 2023, the date of e-filing of the appeal exceeds the outer limit of 45
days and cannot be condoned.
     12. In its impugned order, the NCLT has relied on the decision in V
Nagarajan (supra) to dismiss the appeal on the ground of limitation. The
appellant has sought to distinguish the present case from V Nagarajan
(supra) on both facts and law and has relied on the decision in Sanket
Kumar Agarwal v. APG Logistics Private Limited6.Therefore, it would
be pertinent for us to clarify the law on the limitation period applicable for
filing an appeal against an order of the NCLT under the IBC.
      13. In V Nagarajan (supra), a three-judge Bench of this Court noted
that the significant difference between Section 421(3) of the Companies Act
and Section 61(2) of the IBC is the absence of the words “from the date on
which a copy of the order of the Tribunal is made available to the person
aggrieved” in the latter. The Court held that limitation commences from the
date of pronouncement and not the date of upload of the order or receipt of
a certified copy. However, the Court expressly clarified that the time taken
to procure the certified copy will be excluded from the calculation of the
period of limitation, provided the appellant applies within the prescribed
period of limitation under Section 61(2) of the IBC.
     14. On the facts of the case, the Court noted that the appeal was barred
by limitation as the appellant did not even attempt to secure a certified
copy and only relied on the date of uploading the order on the website.
Significantly, in the case, there was a pronouncement on the date mentioned
on the order and the appellant did not dispute his presence before the NCLT
when the order was pronounced in open court. Speaking through one of us
(D.Y. Chandrachud, J), the Court held as follows:
       “33. The answer to the two issues set out in Section C of the
       judgment—(i) when will the clock for calculating the limitation


6     2023 SCC OnLine SC 976
SANJAY PANDURANG KALATE v. VISTRA ITCL (INDIA)                      319
 LIMITED [DR. DHANANJAYA Y CHANDRACHUD, CJI]


period run for proceedings under IBC; and (ii) is the annexation of a
certified copy mandatory for an appeal to NCLAT against an order
passed under IBC — must be based on a harmonious interpretation
of the applicable legal regime, given that IBC is a Code in itself and
has overriding effect. Sections 61(1) and (2) IBC consciously omit
the requirement of limitation being computed from when the “order
is made available to the aggrieved party”, in contradistinction to
Section 421(3) of the Companies Act. Owing to the special nature
of IBC, the aggrieved party is expected to exercise due diligence
and apply for a certified copy upon pronouncement of the order it
seeks to assail, in consonance with the requirements of Rule 22(2)
of the NCLAT Rules. Section 12(2) of the Limitation Act allows for
an exclusion of the time requisite for obtaining a copy of the decree
or order appealed against. It is not open to a person aggrieved by an
order under IBC to await the receipt of a free certified copy under
Section 420(3) of the Companies Act, 2013 read with Rule 50 of the
NCLT Rules and prevent limitation from running. Accepting such
a construction will upset the timely framework of IBC. The litigant
has to file its appeal within thirty days, which can be extended up to
a period of fifteen days, and no more, upon showing sufficient cause.
A sleight of interpretation of procedural rules cannot be used to defeat
the substantive objective of a legislation that has an impact on the
economic health of a nation.
35. The appellant was present before NCLT on 31-12-2019 when
interim relief was denied and the miscellaneous application was
dismissed. The appellant has demonstrated no effort on his part to
secure a certified copy of the said order and has relied on the date of
the uploading of the order (12-3-2020) on the website. The period of
limitation for filing an appeal under Section 61(1) against the order
of NCLT dated 31-12-2019, expired on 30-1-2020 in view of the
thirty-day period prescribed under Section 61(2). Any scope for a
condonation of delay expired on 14-2-2020, in view of the outer limit
of fifteen days prescribed under the proviso to Section 61(2). The
lockdown from 23-3-2020 on account of the Covid-19 Pandemic and
the suo motu order of this Court has had no impact on the rights of
the appellant to institute an appeal in this proceeding and NCLAT has
320            SUPREME COURT REPORTS                         [2023] 15 S.C.R.


       correctly dismissed the appeal on limitation. Accordingly, the present
       appeal under Section 62 IBC stands dismissed.”
      15. Subsequently, in Sanket Agarwal (supra), this Court clarified the
law laid down in V Nagarajan and held that (i) the limitation stops running
on the e-filing of an appeal before the NCLAT and not on presentation of
a physical copy; (ii) the date on which the order is pronounced is to be
excluded from the calculation of limitation, and (iii) the time taken by the
NCLT to provide the appellant with the certified copy would be excluded
from the calculation of limitation, provided the appellant applies within
the prescribed period of limitation under Section 61(2) of the IBC. The
Court held:
       “28. In the present case, the application for a certified copy was sent
       from Delhi to Chennai on 2 September 2022, which was received on 5
       September 2022, within the period of limitation of 30 days specified in
       Section 61(2). This aspect lies in contrast to the facts as they obtained
       before this Court in the judgment in V Nagarajan (supra)where even
       the application for obtaining the certified copy was not filed. In the
       present case, the appellant exercised due diligence and applied for
       a certified copy upon pronouncement of the order in terms of Rule
       22(2) of the NLCAT Rules 2016. The certified copy was provided to
       the appellant on 15 September 2022. Hence, the period of 10 days
       between 5 September 2022 and 15 September 2022 taken by the court
       to provide a certified copy of the order ought to be excluded when
       determining the period of limitation under Section 61(2) of the IBC.
       29. In view of the above discussion, we have come to the conclusion
       that the NCLAT was in error in dismissing the appeal on the ground
       of limitation.”
     16. From the above discussion of law, It is clear that the date on
which the limitation begins to run is intrinsically linked to the date of
pronouncement. The question that arises in the facts of the present case,
therefore, is when is an order deemed to be pronounced. The National
Company Law Tribunal Rules, 20167provide guidance in this regard. Rule


7     “NCLT Rules”
    SANJAY PANDURANG KALATE v. VISTRA ITCL (INDIA)                         321
     LIMITED [DR. DHANANJAYA Y CHANDRACHUD, CJI]


89(1) of the NCLT Rules indicates that when NCLAT registry publishes its
cause list, a distinction is drawn between cases listed for pronouncement
of orders and other cases. It states as follows:
     “89. Preparation and publication of daily cause list.— (1) The
     Registry shall prepare and publish on the notice board of the Registry
     before the closing of working hours on each working day the cause list
     for the next working day and subject to the directions of the President,
     listing of cases in the daily cause list shall be in the following order of
     priority, unless otherwise ordered by the concerned Bench; namely;-
     (a) cases for pronouncement of orders;
     (b) cases for clarification;
     (c) cases for admission;
     (d) cases for orders or directions;
     (e) part-heard cases, latest part-heard having precedence; and
     (f) cases posted as per numerical order or as directed by the Bench;”
                                                          (emphasis supplied)
     17. Further, Part XIX of the NCLAT Rules governs the ‘disposal of
cases and pronouncement of orders’. The following rules are relevant:
     “146. Disposal of Cases.- On receipt of an application, petition, appeal
     etc, the Tribunal, after giving the parties a reasonable opportunity of
     being heard, pass such orders thereon as it thinks fit:
     Provided that the Tribunal, after considering an appeal, may summarily
     dismiss the same, for reasons to be recorded, if the Tribunal is of
     opinion that there are no sufficient grounds for proceedings therewith.
     150. Pronouncement of Order.- (1) The Tribunal, after hearing the
     applicant and respondent, shall make and pronounce an order either
     at once or, as soon as thereafter as may be practicable but not later
     than thirty days from the final hearing.
     (2) Every order of the Tribunal shall be in writing and shall be signed
     and dated by the President or Member or Members constituting the
     Bench which heard the case and pronounced the order.
322           SUPREME COURT REPORTS                         [2023] 15 S.C.R.


      (3) A certified copy of every order passed by the Tribunal shall be
      given to the parties.
      (4) The Tribunal, may transmit order made by it to any court for
      enforcement, on application made by either of the parties to the order
      or suo motu.
      (5) Every order or judgment or notice shall bear the seal of the Tribunal.
      151. Pronouncement of order by any one member of the Bench.-(1)
      Any Member of the Bench may pronounce the order for and on behalf
      of the Bench.
      (2) When an order is pronounced under this rule, the Court Master shall
      make a note in the order sheet, that the order of the Bench consisting
      of President and Members was pronounced in open court on behalf
      of the Bench.”
                                                          (emphasis supplied)
      18. The above provisions of the NCLT Rules, 2016 make a clear
distinction between the ‘hearing’ of an appeal and the ‘pronouncement’
of the order. Rule 150(1) provides that after hearing the parties, the order
may be pronounced either at once or soon thereafter, as may be practicable,
but not later than thirty days from the final hearing. Further, Rule 151
indicates that a member of the bench may pronounce the order for and
on behalf of the Bench. When the order is pronounced, the court master
shall make a note in the order sheet to that effect. The language of the
above rules indicates that the pronouncement of the order is necessary
and cannot be dispensed with.
      19. In the present case, the cause list for 17 May 2023 placed on record
by the appellant indicates that the case was listed for admission and not for
pronouncement. Further, on a specific query of the Court, it is not in dispute
between counsel for the appellant and the respondent, that no substantive
order was passed on 17 May 2023 by the NCLT. In these circumstances,
limitation would not begin to run on 17 May 2023 which was the date on
which hearings concluded. As no order was passed before 30 May 2023,
there was no occasion for the appellant to lodge an application for a certified
copy on 17 May 2023. Time for filing an appeal would commence only
     SANJAY PANDURANG KALATE v. VISTRA ITCL (INDIA)                        323
      LIMITED [DR. DHANANJAYA Y CHANDRACHUD, CJI]


when the order appealed from was uploaded since prior to that date no
order was pronounced.
      20. In V Nagarajan (supra), there was an unequivocal pronouncement
of the order before the upload of the order and thus, the decision is not
applicable to the facts of the case. In the facts of the present case, the date
of upload of the order is the same as the date of pronouncement. To avoid
situations such as these, in cases where the matter has been heard on a
particular day but the order is pronounced on a later date, the NCLT must
refrain from affixing the date of hearing on the order. Such an approach
would be a violation of the NCLT Rules, which create a distinction between
hearing and pronouncement and do not allow the NCLT to dispense with
the requirement of pronouncement.
      21. In view of the above, the period of limitation began to run on 30
May 2023. The 30-daylimitation period provided in Section 61(2) of the
IBC concluded on 29 June 2023. Though the appeal was filed beyond the
period of thirty days, it was within the condonable period of fifteen days.
We are of the considered view that the appeal should be restored to the
NCLAT for reconsidering whether the appellant has shown sufficient cause
for condoning the delay beyond thirty days. To facilitate this, the impugned
order of the NCLAT declining to condone the delay is set aside and the
proceedings are restored to the file of the NCLAT. We are not inclined to
stay the CIRP at this stage. However, the NCLAT is directed to dispose of
the appeal at the earliest.
      22. Before concluding, we must note that it was settled in Sanket
Agarwal (supra) that the date of e-filing of the appeal and not filing of the
physical copy of the appeal stops the limitation from running. One of us
(D.Y. Chandrachud, J.) had occasion to observe that the requirement of
e-filing followed by physical filing results in duplication of effort and is a
disincentive for e-filing. The Court held that:
     “30. […] Moreover, it is utterly incomprehensible why NCLAT should
     insist on physical filing in addition to e-filing. This unnecessarily
     burdens litigants and the Bar and is a disincentive for e-filing. A
     lawyer or litigant who is compelled to file physical copies in addition
     to e-filed documents will have no cogent reason to resort to e-filing.
     This duplication of effort is time consuming. It adds to expense. It
324            SUPREME COURT REPORTS                         [2023] 15 S.C.R.


      leaves behind a carbon footprint which is difficult to efface. The
      judicial process has traditionally been guzzling paper. This model is
      not environmentally sustainable. If some judges are uncomfortable
      with e-files, the answer is to provide training to them and not to
      continue with old and outmoded ways of working. The judiciary
      has to modernize and adapt to technology. The tribunals can be no
      exception. This can no longer be a matter of choice. The IBC is a
      significant prong in economic reforms. It has radically reshaped the
      law relating to insolvency and bankruptcy. The manner in which the
      law is administered will have to keep pace with technology. Both the
      Union government in its rule making capacity and the administrative
      heads of tribunals must ensure a seamless transition to working in the
      electronic mode.”
     23. We must appreciate the swift action taken by the NCLAT in view
of the above observations. On 15 May 2023, soon after the decision in
Sanket Agarwal (supra), an order was issued by the Registrar, NCLAT
noting that “filing of hard copies of Appeals/ Interlocutory Applications/
Reply / Rejoinder etc. shall not be mandatory with immediate effect.” Such
proactive action by tribunals is essential to ensure that the move towards a
modernized and technology-friendly judiciary trickles down to every judicial
forum across the country. We record our appreciation of the proactive steps
taken by the Chairperson, Members and the Registry of the NCLAT.
      24. The appeals are accordingly disposed of.
      25. Pending applications, if any, stand disposed of.


Headnotes prepared by:                                        Appeals disposed of.
Ankit Gyan