In a recent ruling, the Supreme Court has asserted that the National Company Law Tribunal (NCLT) is prohibited from stamping the date of the hearing on an order when the matter is heard on one date but the order is pronounced on another. The court emphasized the importance of the distinction between ‘hearing’ and ‘pronouncement’ under the NCLT Rules, 2016, highlighting that this distinction cannot be overlooked.
The case in question involved the NCLT hearing a matter on 17.05.2023, with the order being uploaded on 30.05.2023. The appellant filed an appeal, raising the question of whether the limitation period, under Section 61(2) of the Insolvency and Bankruptcy Code, 2016, should commence from the date of the hearing (17.05.2023) or the date of the order (30.05.2023).
The Supreme Court bench, comprising Chief Justice of India Dr Dhananjaya Y Chandrachud, Justice J B Pardiwala, and Justice Manoj Misra, emphasized that NCLT must refrain from affixing the date of the hearing on the order in such cases. The court lauded the NCLAT for its proactive steps towards modernizing and embracing technology in the judiciary, as observed in a previous case.
The background of the case involved a petition filed by Vistra ITCL (India) Limited seeking the initiation of the Corporate Insolvency Resolution Process against Evirant Developers Pvt. Ltd. The appellant, the former director of the corporate debtor, filed an appeal against the NCLT’s dismissal of their application.
The Supreme Court clarified that the limitation period for filing an appeal runs from the date of the pronouncement of the order. It distinguished this case from a previous judgment, V Nagarajan v. SKS Ispat, emphasizing that the date of upload and pronouncement were the same in the appellant’s case.
The court cautioned NCLT against violating the Rules by stamping the date of the hearing on the order when the matter is heard on one date but the order is pronounced on another. The bench held that the limitation would not run from the date of the hearing (17.05.2023) but from the date of the order upload (30.05.2023).
In conclusion, the Supreme Court restored the appeal to NCLAT for reconsideration, directing a review of whether the appellant has shown sufficient cause for condoning the delay beyond the initial 30-day period.
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