No Leniency for Delay: SC Upholds Strict Limitation Under IBC

The Supreme Court’s recent judgment has settled, with finality, several key legal questions surrounding limitation under the Insolvency and Bankruptcy Code (IBC).

In a ruling that leaves no room for ambiguity, the Court unequivocally held that the limitation period for filing an appeal begins from the date of pronouncement of the order not from the date of receiving a certified copy. This was reaffirmed with respect to two NCLT orders dated July 20, 2023.

What's The Matter?

The appellant, a suspended Managing Director, challenged two NCLT orders one rejecting his resolution plan, the other approving a rival consortium’s bid for Dharti Dredging and Infrastructure Ltd. However, his appeals were dead on arrival: filed 37 days after the orders, well beyond the IBC’s statutory limit of 30 days, extendable by a maximum of 15 days upon sufficient cause.

To make matters worse, the delay was cloaked in false claims about having applied for certified copies, and the pleadings were riddled with contradictions. The Court saw through the smokescreen and dismissed the appeals without hesitation.

The Court’s judgment delivered a strong rebuke to procedural indiscipline in insolvency litigation. It held that:

• Limitation begins from the date of pronouncement, not from the date of receiving certified copies.

  
  

• The outer limit of 45 days under Section 61(2) of the IBC is absolute. Even the Supreme Court’s

  extraordinary powers under Article 142 cannot override this.

  
  

• Failure to apply for certified copies and making misleading assertions is fatal and warrants outright dismissal.

This position, originally articulated in V. Nagarajan v. SKS Ispat (2021), was emphatically reaffirmed. The Court also cited National Spot Exchange Ltd. v. Anil Kohli (2022), where it was made clear that deadlines under the IBC are sacrosanct and non-negotiable.

the Court drew a stark contrast between the IBC and the Companies Act, 2013. While the latter allows for the limitation period to begin from the date a copy is made available, the IBC’s regime is far stricter providing no such leniency unless the party promptly applies for a certified copy.

The appellant’s failure to do so and worse, his attempt to mislead the Court proved fatal. Under Rule 22(2) of the NCLAT Rules, certified copies must accompany the appeal. His non-compliance with this mandatory requirement, coupled with untruthful pleadings, sealed the fate of his case.

The Court invoked the clean hands doctrine, underlining that litigants who misrepresent facts cannot seek relief. As held in Cethar Ltd. v. SKS Ispat (2022), failure to obtain certified copies in time is sufficient cause for dismissal, regardless of the merits.

This ruling marks a significant judicial shiftn away from flexibility and toward finality. The Court made clear that the legislative intent behind the IBC is to ensure time-bound resolutions.

That objective cannot be undermined by casual procedural breaches.

In Sanjay Pandurang Kalate (2024), the Court had already emphasized that limitation under the IBC is tied strictly to the date of pronouncement. This judgment builds on that foundation, sending a loud and clear message: procedural compliance is not optional.

For stakeholders in the IBC ecosystem—debtors, creditors, resolution professionals, and lawyers alike—the implications are profound. Appeals must be filed within the prescribed 30-day window, with all required documents in place. Misstatements, delays, or casualness will not be condoned.

The Supreme Court has drawn a firm line in the sand. In insolvency matters, deadlines are sacrosanct. No more excuses. No more second chances. Compliance is the rule—and the only way forward.