In a significant interpretation of the Insolvency and Bankruptcy Code (IBC), the Supreme Court on Wednesday ruled that the National Company Law Appellate Tribunal (NCLAT) is statutorily barred from condoning delays in filing appeals beyond 15 days after the prescribed 30-day period.
A bench comprising Justices J.B. Pardiwala and R. Mahadevan emphasised that the IBC has laid down strict timelines for initiating and pursuing insolvency proceedings to prevent the misuse of the process for recovering time-barred debts.
โThe proviso to Section 61(2) clearly limits the NCLATโs jurisdiction to condone delay only up to 15 days beyond the initial 30-day period,โ the court said, clarifying that this outer limit is mandatory and not subject to judicial discretion.
The court added that the appellate mechanism under the IBC is โstrictly time-bound by designโ to maintain the speed, finality, and integrity of the insolvency resolution framework. โEven a delay of a single day is fatal if the statute does not provide for its condonation,โ the bench observed.
Allowing condonation beyond the statutory limit, the court warned, would โdefeat the legislative intent and open the floodgates to belated and potentially frivolous petitions,โ thus undermining the core objectives of the IBC.
The ruling came in response to an appeal challenging an NCLAT order that had condoned a delay beyond the permissible period. The Supreme Court set aside the NCLAT’s order, reinforcing that tribunals must adhere strictly to the timelines provided under the IBC.
