Section 423 of the Companies Act, 2013 provides that any person aggrieved by any order of the Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of receipt of the order, on any question of law arising out of such order. The appeal is not a matter of right on facts; it is confined to questions of law, and the Supreme Court has the discretion to condone a delay where the appellant was prevented by sufficient cause.
The Question of Law
The most significant limitation on the Section 423 appeal is the “question of law” requirement. The appellant cannot challenge the concurrent findings of fact by the NCLT and the NCLAT unless the findings are perverse or based on no evidence. The appeal must identify the question of law, and it must show how the NCLAT erred in its determination.
The distinction between a question of law and a question of fact is not always clear. A mixed question of law and fact may be treated as a question of law where the legal principle is misapplied to the facts. The appellant must frame the question carefully, and must persuade the Supreme Court that the question is substantial.
The Limitation and Condonation
The sixty-day period runs from the date of receipt of the NCLAT order. The Supreme Court has the power to condone the delay where the appellant shows sufficient cause. The power is discretionary, and it is exercised sparingly. The appellant must explain the delay and must show that the delay was not due to negligence or want of diligence.
The Procedure
The appeal is filed by way of a petition for special leave or a statutory appeal, depending on the nature of the order. The Supreme Court may hear the appeal itself or may remit the matter to the NCLAT for reconsideration. The Court may also grant interim relief pending the disposal of the appeal.
The Strategic Considerations
An appeal to the Supreme Court is expensive and time-consuming. The appellant must weigh the cost against the likelihood of success, and must consider whether the NCLAT’s order can be challenged by way of a review or a curative petition. The Supreme Court’s docket is heavy, and the Court accepts only a small fraction of the appeals that are filed.
A technically sound Supreme Court appeal focuses on a clear question of law, a demonstrable error in the NCLAT’s reasoning, and a substantial question of public importance. The appellant who approaches the Court without these elements will find that the appeal is dismissed at the threshold.
Call to Action
Anuj Desai & Associates advises companies and appellants on the Supreme Court appeal from the NCLAT—from the identification of the question of law and the limitation analysis to the drafting of the appeal and the interim relief. If you are considering an appeal to the Supreme Court, we can help you assess the prospects.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
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