NCLT Allahabad Dismisses Delay Condonation Plea in Liquidation Case
Tribunal Upholds Strict Timelines Under IBC, Dismisses Claim by Electric Distribution Division-I Due to Delay
In a landmark decision reinforcing the sanctity of statutory timelines under the Insolvency and Bankruptcy Code (IBC), 2016, the National Company Law Tribunal (NCLT) Allahabad Bench has dismissed the application filed by Electric Distribution Division-I seeking condonation of a 45-day delay in filing an appeal against the rejection of its claim by the liquidator of M/s Shree Bhawani Paper Mills Limited. The judgment, delivered on September 8, 2025, highlights the Tribunal's commitment to adhering to the strict procedural timelines mandated by the IBC.
The bench, comprising Judicial Member Sh. Praveen Gupta and Technical Member Sh. Ashish Verma, held that the Tribunal lacked the jurisdiction to condone delays beyond the statutory periods prescribed under the IBC. The decision stems from IA No. 229 of 2022, which was filed by the applicant on July 13, 2022, challenging the liquidator's order dated December 21, 2021, rejecting its claim. The applicant had further sought condonation of the delay through IA No. 273 of 2022.
The Tribunal's decision draws attention to the meticulous statutory framework set forth by the IBC, emphasizing that administrative inefficiencies, procedural delays, or departmental correspondences cannot be considered "sufficient cause" for condonation under the Limitation Act, 1963. The NCLT cited judgments from the Hon'ble Supreme Court and the National Company Law Appellate Tribunal (NCLAT), including the cases of National Spot Exchange Ltd. v. Anil Kohli and Cloud 9 Apartments Owners Association v. Mohit Goyal, which reinforce the principle of strict adherence to timelines during insolvency proceedings.
Despite the applicant's reliance on the Supreme Court's suo motu extension of limitation during the COVID-19 pandemic, which provided a 90-day extension from March 1, 2022, the Tribunal noted that the application was filed 45 days beyond this extended period, thus barring any further condonation.
The Tribunal also dismissed the applicant's argument that government bodies should be granted leniency in delay condonation, citing the Supreme Court's stance that public authorities are on the same footing as private litigants regarding limitation laws.
In conclusion, the NCLT's dismissal of the condonation plea underscores the importance of timely action by claimants in insolvency proceedings and sets a precedent for future cases involving statutory delays under the IBC.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Strict timelines under the Code for filing claims and appeals - Tribunal lacks jurisdiction to condone delay beyond statutory periods unless specifically provided under the Code.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Section 42, Limitation Act, 1963 Section 5, Insolvency and Bankruptcy Code, 2016 Sections 38 and 42.
