NCLAT: Section 17 of Limitation Act does not come into play when Limitation is Prescribed for an Appeal

NCLAT: Section 17 of Limitation Act does not come into play when Limitation is Prescribed for an Appeal

The National Company Law Appellate Tribunal (in short NCLAT), Principal bench, through its division bench Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), while adjudicating an appeal filed in Maharashtra State Electricity Distribution Company Ltd. vs. NRC Ltd. and another has held that Section 17(1) of Limitation Act, 1963 deals with period of limitation in the case of any suit or application. On the face of it, Section 17(1)(c) does not come into play in an Appeal when intimation is prescribed for an Appeal.

National Rayon Corporation Limited (hereinafter referred to as Respondent/Corporate Debtor) was admitted into Corporate Insolvency Resolution Process (in short CIRP). On 13th March, 2020 the Adjudicating Authority approved the Resolution Plan submitted by Adani Properties Pvt. Ltd. (hereinafter referred to Successful Resolution Applicant) for the Corporate Debtor.

The appellant Maharashtra State Electricity Distribution Company Ltd. (in short MSEDCL) filed an appeal challenging the order of the Adjudicating Authority dated 13th March, 2020 by which Resolution Plan was approved by the Adjudicating Authority. The respondent submitted its claim towards electricity dues after the prescribed time. Hence, its claim was neither admitted by the Resolution Professional nor included in the approved resolution plan. However, the appeal was filed after delay of 244 days.

MSEDCL contended that it became aware that the order needs to be challenged when the Successful Resolution Applicant filed a writ petition against it on 29th June, 2022, seeking direction against MSEDCL. Further, the limitation stood extended in view of Section 17(1)(c) of the Limitation Act, 1963.

The Bench observed that the limitation for filing an Appeal is 30 days under Section 61 of IBC and only 15 days of delay could be condoned under Section 61(2) proviso of IBC.

The NCLAT observed, "section 17(1) deals with period of limitation in the case of any suit or application. On the face of it, Section 17(1)(c) does not come into play in an Appeal when limitation is prescribed for an Appeal. Therefore, we are in the present case, considering the limitation for filing an Appeal hence, Section 17(1)(c) has no application in the facts of the present case."

The Bench observed that Section 17(1)(c) of Limitation Act was inapplicable to the case and thus the delay of 244 days cannot be condoned. Accordingly, the bench dismissed the Delay Condonation Application as well as the Appeal.