Re-presentation’ of appeal is not fresh filing

Posted On - 14 September, 2022 • By - Altamash Qureshi

Under the Insolvency and Bankruptcy Code, 2016 (Code) and under the Companies Act, 2013 (Act), an order of the National Company Law Tribunal (NCLT) can be appealed before the National Company Law Appellate Tribunal (NCLAT). The time-period for filing such an appeal is maximum of 45 days under the Code and 90 days under the Act. Further, the NCLAT Rules, 2016 (NCLAT Rules) provide that if the appeal or any documents attached to it is found to be defective, the party filing the appeal has to cure the defect within 7 days and ‘re-present’ the appeal. This period can also be extended for a reasonable time by the Registrar if the party shows sufficient cause.

In Mr. Jitendra Virmani v. MRO-TEK Realty Ltd. & Others (Jitendra Virmani Judgment), the NCLAT held that if the defects in an appeal are not cured within 7 days, then subsequent re-presentation after curing the defects will be treated as ‘fresh filing’ of an appeal. This view was reiterated by the NCLAT in Arul Muthu Kumaara Samy v. Register of Companies (Arun Samy Judgment) where the NCLAT further held that if the defects in an appeal under the Act are not cured within 7 days, then the delay of more than 90 days cannot be condoned by the NCLAT, and the appeal will be barred by law of limitation.

On 12 August 2022, the NCLAT referred the following two issues to a larger bench of the NCLAT:

(i) whether the 45 / 90 day-period for filing the appeal will include the period for curing the defect? and

(ii) where the curing of defect and re-presentation of appeal is done after the 7-day period, will it amount to a ‘fresh filing’ of the appeal?

Vide its order dated 30 August 2022, a five-member bench (Special Bench) of the NCLAT in V.R. Ashok Rao and Others v. TDT Copper Limited (Ashok Rao Judgment) has clarified that re-presentation beyond 7 days can in no manner be said to be fresh filing. The Special Bench of the NCLAT relied upon the Supreme Court’s judgment in Northern Railway v. Pioneer Publicity Corporation Private Limited, where the Supreme Court held that the limitation period provided in a statute would only be applicable to initial filing of an appeal and not on any subsequent filing on removal of defects.

The Special Bench noted that under the NCLAT Rules there is no concept of considering re-presentation of an appeal after curing of defects as fresh filing of appeal. The Special Bench further noted that limitation period provided under the Code and the Act are only limited to ‘filing of an appeal’ and nowhere deals with re-presentation of an appeal. Even the NCLAT Rules empowers the Registrar to allow the parties concerned a reasonable time to extend the time for compliance, which power is not hedged by any period of limitation. Therefore, the Special Bench ruled that no limitation is prescribed for re-presentation of an appeal and the same cannot be confined to the 45 days / 90 days limitation period provided expressly for ‘filing’ an appeal.

Therefore, the NCLAT held that the Jitendra Virmani Judgment and the Arun Samy Judgment do not stipulate the correct law, and clarified that:

(i) the 45 / 90 day-period for filing an appeal under the Code and the Act excludes the period for curing the defect and re-presentation of the appeal; and

(ii) where the curing of defect and re-presentation of appeal is done after the 7-day period, it will amount to a ‘re-presentation’ of the appeal and not a ‘fresh filing’. Even if, there is a delay in re-presentation of more than 7 days, the same can be condoned on sufficient justification by the parties.

Authors: Altamash Qureshi and Shrishti Mishra

The information contained in this document is not legal advice or legal opinion. The contents recorded in the said document are for informational purposes only and should not be used for commercial purposes. Acuity Law LLP disclaims all liability to any person for any loss or damage caused by errors or omissions, whether arising from negligence, accident, or any other cause.