Limitation Period under IBC Starts From Date of Judgment Pronounced in Open Court: Supreme Court [Read Judgement]

The Supreme Court held that the incident which triggers the running of the limitation period under the Insolvency and Bankruptcy Code (IBC) 2016 is the the date of pronouncement of the Order and in case of non-pronouncement of the Order when the hearing concludes, the date on which the Order is pronounced or uploaded on the website.

A Rajendra, the appellant, filed the appeal against the Order dated 18.01.2024 passed by the National Company Law Appellate Tribunal ( “NCLAT”) where appeals preferred by the appellant herein stand dismissed as a consequence of dismissal of the applications of condonation of delay on the even date.

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The Court noted that the statute of limitations begins to run on the day the judgment was rendered in public. According to Section 12(1) of the Limitation Act of 1963, the party may, however, exclude the time frame during which the certified copy of the order was being prepared in response to an application that the party filed.

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A bench comprising Justice AS Oka, Justice Ahsanuddin Amanullah and Justice AG Masih observed that in cases where the court rendered the decision in public, the statute of limitations begins to run on that day. In order to exclude the time when the certified copy was being prepared for a party's preferred application, the appellant may, nevertheless, request relief under Section 12(2) of the Limitation Act.

According to the Court, if a party does not request a certified copy, the statute of limitations will begin on the day after the order is declared because, in accordance with Section 61, the date of order pronouncement is excluded.

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The Court pointed out that a certified copy of the order must be filed with the appeal in accordance with Rule 22 of the NCLAT Rules. "Exemption from filing of certified copy, as has been referred to above, cannot be claimed as a matter of right in terms of the statutory requirements of the Rules," the Court stated.

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The Court further held that the limitations must be interpreted narrowly. The clause pertaining to the 15-day time extension must be interpreted rigorously and cannot be used liberally.

The bench rejected the appeals against the orders of the National Company Law Appellate Tribunal as time-barred. The Court also held that when no certified copy was applied, benefit of Section 12(1) of the Limitation Act cannot be claimed.

To Read the full text of the Order CLICK HERE

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