Conversion of IBC Appeal Into Companies Act Appeal Does Not Save Limitation: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently held that an appeal filed under the insolvency law does not provide continuity for limitation when it is transformed into an appeal under the company law.

The tribunal was dealing with an appeal initially filed under Section 61 of the Insolvency and Bankruptcy Code (IBC), which provides for appeals against orders in insolvency proceedings. The appellant later sought to convert it into an appeal under Section 421 of the Companies Act, 2013, which provides for appeals against orders passed in company law proceedings.

A bench comprising Judicial Member Justice Sharad Kumar Sharma and Technical Member Arun Baroka observed, “Such a transformation of proceedings does not provide it with a continuity of proceedings under the earlier statute. Rather, it would be a rebirth with a fresh start from the date of institution under different provisions of law.”

The dispute arose from an order dated September 8, 2025. The appellant initially filed an appeal under Section 61 of the IBC on November 20, 2025, along with an application seeking condonation of 53 days' delay.

The tribunal later permitted the appellant to convert the appeal into one under Section 421 of the Companies Act and directed it to amend the existing appeal memo. Instead of amending that appeal, however, the appellant filed a fresh Section 421 appeal on January 30, 2026.

The appellant argued that the time spent pursuing the earlier appeal under Section 61 should be excluded under Section 14 of the Limitation Act, 1963.

The tribunal held that Section 14 could not be invoked in the circumstances. It noted that the original Section 61 appeal was filed on the 76th day after the impugned order, whereas Section 61 allows an appeal to be filed within 30 days and permits a maximum additional 15 days for condonation.

The original appeal was therefore already beyond the maximum condonable period when it was filed.

Section 421 of the Companies Act provides a separate limitation period. An appeal has to be filed within 45 days from the date on which a copy of the NCLT's order is made available, with a further 45 days available if sufficient cause is shown for the delay.

Since the appellant filed the Section 421 appeal on January 30, 2026, the tribunal calculated the limitation from the September 8, 2025 order. It found a delay of 144 days. Even after allowing the additional 45-day condonable period, the appeal remained barred by 54 days.

The tribunal distinguished the case from authorities involving judicial transfers of proceedings, where the original proceedings retained continuity after being moved to another forum. It described the present case as one of “transformation” rather than “transfer”.

The appellant had invoked the wrong appellate jurisdiction and later sought to change the appeal from one under the IBC to one under the Companies Act. The tribunal held that this changed the character of the proceedings.

The tribunal also noted that its January 29, 2026, order had permitted the appellant to amend the existing Section 61 appeal. It had not granted liberty to file a fresh appeal under Section 421.

The appellant's application had also sought condonation of delay in the Section 421 appeal. The January 29 order did not grant that relief or make any observation on the delay.

The tribunal therefore held that limitation for the Section 421 appeal had to be determined independently under Section 421(3) of the Companies Act. It held that Section 14 of the Limitation Act could not be invoked to exclude the period spent pursuing the Section 61 appeal.

The tribunal rejected the Section 421 appeal and the accompanying delay-condonation application. It consequently rejected the earlier Section 61 appeal as well.