NCLAT Holds Section 198 Cannot Be Used To Extend IBC Appeal Deadline, Rejects IBBI's 103-Day Delay

The National Company Law Appellate Tribunal (NCLAT) has held that a provision allowing delay to be excused when the Insolvency and Bankruptcy Board of India fails to perform a statutory duty cannot be used to extend the strict deadline for filing appeals under the Insolvency and Bankruptcy Code.

A bench of Justice Ashok Bhushan and Technical Member Indevar Pandey observed, “The said provision of Section 198 can have no relevance with regard to Section 61 of the IBC, which provides for limitation for filing an Appeal. The Appellant has not been able to refer to any provisions under the IBC, where the Board has been required to perform a function of filing an Appeal before the Appellate Tribunal within the specified time."

The tribunal dismissed the regulator's plea to condone a delay of 103 days and rejected the appeal as barred by limitation.

The case arose from an order passed on August 13, 2025, by the National Company Law Tribunal in Mumbai approving a resolution plan in the corporate insolvency resolution process of Township Developers India Ltd.

Under Section 61 of the Code, any person aggrieved by an order of the tribunal must file an appeal within 30 days. The Appellate Tribunal may permit a further delay of up to 15 days if sufficient cause is shown. In effect, 45 days is the outer limit. The IBBI filed its appeal on December 24, 2025, well beyond this period.

To overcome the delay, the IBBI relied on Section 198 of the Code. That provision states that where the Board does not perform any act within the time specified under the Code, the relevant Adjudicating Authority may condone the delay. The regulator argued that because Section 198 opens with a non obstante clause, it should be read broadly.

It submitted that even though the provision refers to the Adjudicating Authority, the Appellate Tribunal could exercise similar powers and condone the delay in filing the appeal. The respondents opposed this stand, contending that Section 198 is limited to situations where the Board delays in carrying out its regulatory or administrative functions under the Code, and does not extend to the time limit prescribed for filing appeals.

Agreeing with the respondents, the Tribunal examined the language and overall scheme of Section 198 and noted that it applies only “where the Board does not perform any act within the period specified under this Code.”

The Bench clarified that the power to condone delay under that provision is linked to cases where the Board fails to carry out a statutory function within a prescribed timeline.It cannot be used to extend the limitation period governing appeals under Section 61.

Addressing the argument that the Appellate Tribunal could exercise similar powers, the bench observed, “It is true that the Appellate Tribunal can also exercise the jurisdiction, which is vested in the Adjudicating Authority, but the power has been given for specific purpose and object to the relevant Adjudicating Authority, which can never be intended to contemplate condonation of delay under Section 61 by the Appellate Tribunal.”

While noting that the IBBI's locus to file an appeal “cannot be denied” if it is aggrieved by an order, the tribunal held that the delay in this case was far beyond the statutorily condonable period and therefore incapable of being excused. The application for condonation and the appeal were accordingly rejected.

For Appellant: Senior Advocate N. Venkatraman, with Advocates Amrita Singh and Prasang Sharma

For Respondents: Senior Advocate Arun Kathpalia with Advocates Milan Singh Negi, Nikhil Kumar Jha, and Katyayani for R1; Senior Advocate Krishnendu Dutta with Advocates Chitra, Neharika Sharma, Khyati Mehrotra, Treenok Guha, and Utkarsh Mishra for R2; Senior Advocate Abhijeet Sinha with Advocates D. Arambhan, Pranaya Goyal, Chiranjivi Sharma, Nanki Grewal and Nehal Gupta for R3.