High Court Should Not Have Directed Delay Condonation After Dismissing Writ Against NCLT Order: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Chennai has observed that a High Court should not have directed exclusion of time or condonation of delay after declining to entertain a writ petition on the ground of availability of an alternative statutory remedy under the Insolvency and Bankruptcy Code (IBC).

A bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain held.“Therefore, for all practical purposes when the Hon'ble High Court has observed that the writ petition is not maintainable and has declined to interfere on the same count, it becomes functus officio. Once the maintainability question has been decided by the High Court, on the basis of availability of an appellate remedy before the NCLAT under Section 61 itself, the High Court should not have passed an order, directing this Appellate Tribunal to condone the delay, since the Appellate Tribunals created under Section 410 of Companies Act, under law, are kept out of the supervisory jurisdiction of the High Courts,”

The ruling came in appeals filed by P V Mohammed Equbal and Ponnuvalappil Zubair, personal guarantors, against whom Tata Capital Limited initiated insolvency proceedings under Section 95 of the IBC before the NCLT, Kochi Bench.

The appellants challenged the NCLT orders dated May 27, 2025 admitting the insolvency proceedings. They sought exclusion of the time spent in pursuing writ petitions before the Kerala High Court while computing the limitation for filing appeals before the NCLAT.

The tribunal noted that the appeals were filed in mid-November 2025. This was about 174 days after the NCLT orders. This was far beyond the statutory period of 30 days, extendable by a further 15 days under Section 61(2) of the Code.

It also noted that the writ petitions were filed before the High Court on the 40th day from the date of the NCLT orders. This was after the expiry of the limitation period.

The High Court had declined to entertain the writ petitions on the ground that an alternative remedy was available under the IBC. It had, however, directed that the time spent in the writ proceedings be excluded while computing the limitation before the NCLAT.

The appellate tribunal disagreed with this approach. It observed that insolvency proceedings under the IBC follow a strict and time-bound framework. It said parties cannot extend limitations by approaching the High Court after the expiry of the prescribed period.

"We are of the view that, the benefit of limitation ought not to have been extended on the directives of the Hon'ble High Court, because the time consumed by the Appellants while pursuing the writ remedies, was not statutorily available for exclusion from limitation under law, and further, because the writ petition itself was preferred after the expiry of period of limitation of 30 days as prescribed under Section 61 (2) of the Code, having been filed on 05.07.2025, that is, the 40th day from the date of pronouncement of the impugned order. ” the tribunal observed.

The NCLAT relied on its earlier ruling in Johnson Lifts Pvt. Ltd. v. Tracks & Towers Infratech Pvt. Ltd., reiterating that High Courts should not condone delay or issue such directions after holding proceedings before them to be not maintainable.

It also referred to the Supreme Court's decision in Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd. It said a special statute like the IBC overrides general law, and its limitation framework cannot be bypassed through writ jurisdiction.

Holding that the appeals were barred by limitation, the tribunal dismissed the appeals and all pending applications.