NCLAT Dismisses ED’s Appeal as Time-Barred: Limitation Begins from Date of Order, Not Knowledge [Read Order]

Limitation Begins on Date of Order: NCLAT Dismisses ED’s Appeal as Time-BarredThe National Company Law Appellate Tribunal (NCLAT) has dismissed the Directorate of Enforcement’s (ED) appeal challenging the approval of a resolution plan, holding that the appeal was filed beyond the statutory time limit.

The appeal was filed against an order passed by the National Company Law Tribunal (NCLT), Kolkata Bench, on 7 January 2025, wherein the resolution plan of Varutha Developers Pvt. Ltd. was approved. The ED sought to challenge this approval, arguing that it did not know the order until 25 February 2025, during proceedings before the Appellate Tribunal under the Prevention of Money Laundering Act (PMLA).

On this basis, the ED sought condonation of a 14-day delay, contending that if the limitation were counted from the date of their knowledge (25 February), the appeal filed on 9 April would fall within the outer limit of 45 days (30 days plus 15 days condonable). In the alternative, they sought condonation of a 62-day delay from the date of the order itself.

The Tribuna, however, rejected this argument, stating that the IBC prescribes a strict and non-negotiable timeline for appeal: 30 days from the date of the order with a maximum condonable extension of 15 days and nothing beyond that.

The core issue before the Tribunal was whether the limitation period for filing an appeal under Section 61 could be computed from the date the appellant gained knowledge of the order, especially when the appellant was not a party to the original proceedings.

The NCLAT held that it cannot be computed like that and relied on several judgments, including the Supreme Court’s authoritative decisions in V. Nagarajan v. SKS Ispat & Power Ltd., Sanjay Pandurang Kalate v. Vistara ITCL (India) Ltd., and Tata Steel Ltd. v. Rajkumar Banerjee. The Tribunal asserted that the limitation begins from the date of pronouncement, not from the date of receipt or knowledge of the order.

Quoting from V. Nagarajan, the NCLAT noted that accepting the date of knowledge as the starting point would defeat the purpose of the IBC’s time-bound resolution framework and open the floodgates to delayed and indefinite appeals.

The ED attempted to argue that because it was not a party to the NCLT proceedings, the limitation period should begin from when it learned of the order. But the Tribunal found no legal support for such a distinction. The recent Tata Steel decision reiterated that even non-parties must adhere to the statutory limit, and the law provides no scope for extending the timeline based on subjective knowledge.

The Tribunal asserted that the IBC is a self-contained code with strict deadlines to ensure prompt resolution. Any deviation from the statutory period, except as explicitly provided under Section 61(2), is beyond the Tribunal's jurisdiction

Having found the appeal filed well beyond the maximum permissible 45-day window, the Tribunal concluded it had no jurisdiction to condone the delay. As a result, the application for condonation of delay (I.A. No. 2327 of 2025) was dismissed, and the memo of appeal was rejected.

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