Limitation Act Cannot Extend 14‑Day Appeal Period: NCLAT Dismisses Appeal for 1616-Day Delay in Claim Rejection Challenge [Read Order]

In a recent ruling, theNational Company Law Appellate Tribunal (NCLAT) Chennai has held that the 14-day appeal period prescribed under Section 42 of the Insolvency and Bankruptcy Code (IBC) is absolute and cannot be extended by invoking the Limitation Act, and dismissed an appeal filed 1616 days after the liquidator rejected the claim.

A rejection order was communicated by the liquidator on February 19, 2020, to the applicant. Under Section 42 of the Insolvency and Bankruptcy Code (IBC), Sansar had 14 days from receipt of that communication to appeal before the Adjudicating Authority.

Instead of filing within this statutory window, appellant delayed and eventually sought to challenge the rejection after 1616 days.

The appellant, Sansar Investment & Finance Company Pvt ltd argued that unlike Section 61, Section 42 does not rigidly bar condonation and should be interpreted liberally. It claimed that the rejection of its claim by the liquidator was already part of the CIRP appeal proceedings pending before the Appellate Tribunal, and that the delay in filing a counter-affidavit by the liquidator contributed to its late filing.

They also relied on the earlier observation in Transfer Appeal, asserting that it opened the door for applying Section 238A to Section 42 appeals

Lastly, the appellant pleaded bona fides and ignorance of its right to appeal, arguing that the delay was not deliberate and should be condoned in the interest of justice.

After hearing the submission, the tribunal observed that the Tribunal firmly rejected this line of reasoning, stating that Section 42 is a self-contained provision prescribing a 14-day window from the date of receipt of the liquidator’s decision.

The bench of Justice Sharad Kumar Sharma(judicial member )and Indevar Pandey(technical member)stated that “the provisions of Section 42 of the I & B Code from the aspect of the limitation is a self-contained provision under a special statute,” and therefore, general provisions of limitation law cannot be imported to extend the timeline.

They also clarified that CIRP proceedings and appeals under Section 42 operate in distinct legal domains and are not interdependent.

The Tribunal concluded by upholding the NCLT Hyderabad’s order dated 04 September 2024, which had dismissed Sansar Investment & Finance Company Pvt Ltd’s appeal as barred by limitation. Also tribunal found no error in the NCLT’s reasoning, reiterating that the strict 14‑day window under Section 42 of the IBC cannot be extended by invoking the Limitation Act or Section 238A.

Accordingly, the appeal was held to be without merit and dismissed, with all pending interlocutory applications closed.

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