Free certified copy of order issued by NCLT Registry sufficient to file IBC appeal: Supreme Court

The Supreme Court on Friday ruled that an appeal can be filed before the National Company Law Appellate Tribunal (NCLAT) against an order of the National Company Law Tribunal (NCLT) by using the mandatory free-of-cost copy of the NCLT order sent to litigating parties by the NCLT registry [State Bank of India v. India Power Corporation Ltd].

It is sufficient for the appellant to attach a free certified copy of the order under challenge to the appeal, the top court said.

Hence, it overruled an order by NLCAT, which had held that a free order copy sent to the parties by the NCLT registry under Rule 50 of NCLT Rules, 2016 cannot be treated as the "certified" copy that has to be attached (under Rule 22) to an appeal challenging such order.

A Bench of Chief Justice of India DY Chandrachud and Justice Manoj Misra today held that there is no distinction between the free certified copy of the order and the certified order copy made available on payment of costs under Rule 50.

The Court, however, clarified that a litigant cannot evade limitation restrictions by pleading that he was waiting for a free certified copy without availing the option of applying for a certified copy by paying a fee.

"A litigant who does not apply for a certified copy cannot say he was waiting for a free copy to obviate the bar of limitation .... and this was held in V Nagarajan case," the Court observed.

The Court was dealing with an appeal filed by the State Bank of India (SBI) challenging the refusal of the NCLAT's Chennai Bench to condone the bank's delay in filing an appeal.

SBI had sought to initiate insolvency proceedings against India Power Corporation Limited. The NCLT dismissed the plea filed by SBI under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by an order dated October 30, 2023.

The bank sought to challenge this order by filing an appeal before the NCLAT. In its appeal, the SBI also urged the NCLAT to condone a three-day delay in filing the said appeal.

In May 2024, a Division Bench of the NCLAT delivered a split verdict after the two members found themselves unable to agree on whether the order copy attached to SBI's appeal constituted a "certified" copy as required under Rule 22 of the NCLT Rules.

A judicial member was then asked to deliver a tie-breaking opinion. In July this year, this third member concluded that there was a difference between a "free copy" and a certified copy of an order.

The judicial member concluded that the delay in SBI's case could not be condoned. He reasoned that SBI had attached a free-of-cost copy of the NCLT order under challenge in its appeal which could not be equated to a "certified" copy.

The Supreme Court today disagreed with this view and concluded that the delay in the filing of SBI's appeal can be condoned.

It proceeded to restore the appeal and sent it back to NCLAT for reconsideration.

"Free copy was given in November and the appeal was filed in December with a delay of only three days, which falls under condonable limit of 30 plus 15 days ... Bearing in mind provisions of Rule 50 of NCLT Rules 2016 which provides both free certified copies and copies applied for ... We hold that the appeal was filed with condonable limit. Thus we set aside the NCLAT order. Appeal allowed. Appeal restored on the files of NCLAT. We hold that the appeal was within condonable limit of delay," the Court said.

Solicitor General Tushar Mehta and advocate Surabhi Khattar appeared for SBI with Khattar arguing the matter on the Bench's insistence.

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