Can Litigants Circumvent IBC Limitation By Filing Defective Appeals? Supreme Court's Answer Is A Resounding 'No'

The Supreme Court has recently held that litigants cannot circumvent the Insolvency and Bankruptcy Code's strict limitation regime by filing defective appeals to save the limitation and curing defects later at their convenience.

A bench of Justices Dipankar Datta and Satish Chandra Sharma posed the following question:

“Can or should a litigant be permitted to circumvent the rigours of limitation by filing a defective appeal as a device to save limitation and, thereafter, to opt to cure the notified defects at leisure? Can or should this Court countenance such a practice?”

The bench answered both questions in the negative and observed:

“The answers to both questions have to be a resounding 'NO'. To hold otherwise would defeat the object of the IBC and render nugatory the discipline of timelines engrafted both in Section 62 as well as the SCR.”

The ruling came in an appeal filed by C.A. Ramchandra Dallaram Choudhary, the liquidator of a corporate debtor under liquidation, against Adani Infrastructure and Developers Pvt. Ltd. challenging a December 8, 2025 judgment of the National Company Law Appellate Tribunal (NCLAT).

The appeal was presented beyond the prescribed limitation period but within the condonable period. The Registry reported a seven-day delay in filing. The appeal was also marked defective. It was re-filed after an 82-day delay in curing defects.

The court held that permitting litigants to save limitations by filing defective appeals and curing defects later would undermine the time-bound framework of the IBC.

“Any such practice of filing a defective appeal, if encouraged, could result in a litigant dragging the process of re-filing for months and still being heard on his application for condoning re-filing delay premised on the ground that the IBC says nothing about re-filing delay and that the SCR being a procedural law must be read in a manner to aid the rendering of substantive justice to a party who is shown to be above board.”

Rejecting the liquidator's contention that the Supreme Court Rules do not prescribe any outer limit for condoning re-filing delay, the Court held that the Rules cannot override the IBC.

“The SCR is the subordinate legislation in the field and whenever the IBC and the SCR clash, the latter cannot override the express provisions of the former. The IBC must prevail being the statutory edict.”

The Court further held that no litigant can be permitted to seek condonation of re-filing delay beyond the 28-day period available for curing defects.

“Consequently, no litigant can be permitted to subvert the statutory scheme by seeking condonation of re-filing delay beyond the period of 28 (twenty-eight) days after having initially lodged a defective appeal. Once the window of 60 (sixty) days prescribed by the IBC, followed by the window of 28 (twenty-eight) days in re-filing the appeal upon curing of defects permitted by the SCR is shut, the right to appeal stands extinguished.”

The court also held that once the 28-day period for curing defects expires, there is no scope for seeking condonation of re-filing delay in an appeal under Section 62 of the IBC.

The bench also declined the appellant's request for special treatment on the ground that he was acting as a liquidator for the benefit of stakeholders.

“We may also observe that the fact of the appellant being a neutral officer acting under the aegis of this Court for the benefit of all stakeholders and the corporate debtor under liquidation is not sufficient for us to invoke our extraordinary jurisdiction under Article 142 of the Constitution to dilute or override the express statutory timeframes engrafted under the IBC.”, the court noted.

Holding that the appeal had been filed beyond the maximum period condonable under the IBC, the Court dismissed it as time-barred.