NCLAT ruled that converting a Section 61 IBC appeal to a Section 421 Companies Act appeal does not preserve limitation or allow exclusion under Section 14 of the Limitation Act.
IBC Appeal Conversion Does Not Reset Limitation: NCLAT Clarifies
The National Company Law Appellate Tribunal (NCLAT) held that converting an appeal under Section 61 of the Insolvency and Bankruptcy Code (IBC) into a proceeding under Section 421 of the Companies Act, 2013 does not preserve the limitation period or permit the exclusion of time under Section 14 of the Limitation Act, 1963.
The tribunal emphasized that the procedural transformation does not equate to a continuation of the same proceeding for limitation purposes. Thus, fresh appeals under the Companies Act must independently satisfy the prescribed limitation period, and prior pendency under IBC does not toll the limitation clock.
Implications for Practitioners
This decision underscores the importance of strict adherence to limitation timelines when transitioning between IBC and Companies Act proceedings. Legal professionals must file converted appeals promptly and independently assess limitation, rather than relying on prior proceedings to extend time.
