2/19/25, 11:24 AM NCLAT Rejects Condonation Of Delay Application Due To Non-Compliance With Limitation Period U/S 61 Of IBC

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NCLAT Rejects Condonation Of Delay Application Due

To Non-Compliance With Limitation Period U/S 61 Of
IBC
Pratham Kapoor
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11 Oct 2024 4:00 PM
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The National Company Law Appellate Tribunal (NCLAT), Chennai, comprising of

Justice Sharad Kumar Sharma, Member (Judicial) and Shri Jatindranath Swain
(Technical Member), dismissed an appeal under Section 61 of the Insolvency and

https://www.livelaw.in/ibc-cases/nclat-rejects-condonation-of-delay-due-to-non-compliance-of-limitation-period-under-section-61-of-the-ibc-272191 1/18
2/19/25, 11:24 AM NCLAT Rejects Condonation Of Delay Application Due To Non-Compliance With Limitation Period U/S 61 Of IBC

Bankruptcy Code (IBC). The appeal was filed by the Southern Power Distribution
Company of Telangana Ltd. against Kalvakolanu Murali Krishna Prasad (Resolution
Professional for Vaksh Steels Pvt. Ltd.,). The NCLAT observed that the appellant
cannot file an application for condonation of delay as it was duly aware of the
proceedings well before the expiration of the time and as a result not acting within
the prescribed time-period does not allow it to file for condonation of delay.

Also Read - IBC Weekly Round-Up [10th February -16th February 2025] (/ibc-cases/ibc-
weekly-round-up-10th-february-16th-february-2025-284182)

Facts of the Case

The appeal arises out of the order dated January 31, 2020, passed in the company
petition under the Insolvency and Bankruptcy Code, 2016 (IBC). The appealed
order had been approved by the tribunal and a revised final resolution plan was
presented by M/s SVSS Commercial Pvt. LTD., which was approved the Committee
of Creditors (Coc) under Section 31(1) of the IBC.

The appellant was duly informed of the case and had not made an application for
a certified copy of the same within the stipulated time. The window for the same
was up to 1st March 2020.The appellants main contention was that it was not
aware that the case had progressed and as a result could not make an application
for a certified copy on time

Also Read - Related Party Status Established Through Agreement Cannot Be Changed By
Sending Termination Notice Against Terms Of Agreement: NCLAT (/ibc-cases/nclat-related-
party-status-established-through-agreement-cannot-be-changed-by-sending-termination-
notice-against-terms-of-agreement-284177)

Therefore, they sought to condone the delay in filing the appeal. However, emails
of the Appellant reflected that it was aware regarding the case long before the
crossing of limitation period. It was on 4th August, 2021 that this application for
condonation of delay had been filed after which appeal had been preferred on
May 28, 2021, making it much more beyond the prescribed limitation period under
Section 61 of the IBC.

https://www.livelaw.in/ibc-cases/nclat-rejects-condonation-of-delay-due-to-non-compliance-of-limitation-period-under-section-61-of-the-ibc-272191 2/18
2/19/25, 11:24 AM NCLAT Rejects Condonation Of Delay Application Due To Non-Compliance With Limitation Period U/S 61 Of IBC

Also Read - No Bar On Corporate Debtor From Contesting Application U/S 9 Of IBC Even If
No Reply Is Given To Demand Notice Issued U/S 8: NCLAT (/ibc-cases/no-bar-on-corporate-
debtor-from-contesting-application-us-9-of-ibc-even-if-no-reply-is-given-to-demand-notice-
issued-us-8-of-code-nclat-284178)

The appellant relied on the Suo Moto orders of the Supreme Court for extending
the period of limitation in the wake of COVID-19 pandemic.The tribunal stated that
the orders would not be of any use this case and cannot be applicable because the
appellant did not take due diligence nor it acted diligently during the period of
limitation and therefore, the same application for condonation of delay was
dismissed and the appeal for was declared to be barred by limitation.

Also Read - Machinery Hypothecated By Corporate Debtor Against Loan Remains Its Asset If
No Lease Deed Is Shown By Third Party: NCLAT (/ibc-cases/machinery-hypothecated-
corporate-debtor-loan-remains-assets-no-lease-deed-shown-by-third-party-nclat-284135)

Contention of both the Parties

The appellants main argument from the starting of the case is that it was not part
of the original proceedings and has not been aware of the progress of the case. It
was also argued by the appellant that he would be barred from being considered
as a party to the proceeding under Section 21(2) of the IBC Code. The appellant
further tends to rely on the orders of the supreme court for extending the period
of limitation which was adopted by the court during the period of COVID 19
pandemic. To summarize the argument, the appellant stated that even though
appellant participated in the CoC meetings, the mere presence of the same cannot
be considered same to as being party to the proceedings.

The Resolution Professional who was the respondent in this case contended that
the appellant was indeed aware of the proceedings as it is clearly visible from
emails that are originating from the appellant's email address. Another contention
put forward was that the appellant having participated in the Coc meetings, had
sufficient knowledge of the ongoing proceedings and the lack of claim of
knowledge was not valid. It was appellants duty to apply for a certified copy of the
judgement within prescribed period and failure to do so barred the appeal.

https://www.livelaw.in/ibc-cases/nclat-rejects-condonation-of-delay-due-to-non-compliance-of-limitation-period-under-section-61-of-the-ibc-272191 3/18
2/19/25, 11:24 AM NCLAT Rejects Condonation Of Delay Application Due To Non-Compliance With Limitation Period U/S 61 Of IBC

Tribunal's Decision

The Tribunal dismissed the application of the Appellant for condonation of delay in
filling the appeal. The tribunal stated that the appellant was aware of the
proceedings well before the expiration of the time and as a result not acting
diligently to get a copy of the judgement within the prescribed time-period under
Section 61 of the IBC does not allow it to file for condonation of delay. The
Tribunal also ruled out the COVID-19 defence of the appellant stating that the
same is not applicable in this case as the delay started much before the extended
time-period.

As a result, the appeal was dismissed and the condonation application was also
rejected.

Case Title: Southern Power Distribution Company of Telangana Ltd. Vs.

Kalvakolanu Murali Krishna Prasad RP for Vaksh Steels Pvt. Ltd. and Ors

Case Number: Company Appeal (AT) (CH) (Ins) No.177 /2021(IA Nos. 360 & 362 /
2021)

Tribunal: NCLAT, Chennai

Judge: Justice Sharad Kumar Sharma, Member (Judicial)

Technical Member: Jatindranath Swain

Advocate For Appellants: Mr. T.K. Bhaskar, Advocate for Mr. Adithya Reddy,
Advocate

Advocate For Respondents: Ms. Devangi, PCS For Mr. Y. Suryanarayana, Advocate
for R2

Date of Judgement: 01/10/2024

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2/19/25, 11:24 AM NCLAT Rejects Condonation Of Delay Application Due To Non-Compliance With Limitation Period U/S 61 Of IBC

Read/Download Order Here (https://www.livelaw.in/pdf_upload/southern-power-

distribution-company-of-telangana-ltd-vs-kalvakolanu-murali-krishna-prasad-rp-for-

vaks-565273.pdf)

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