The distinction between a defective filing and a non-est filing assumes particular significance in proceedings under the Insolvency and Bankruptcy Code, 2016 (“IBC”), as the insolvency framework is founded on strict statutory timelines. While procedural defects are ordinarily capable of being cured, a filing that is non-est in law raises a more fundamental question regarding the very maintainability of the proceeding.
The significance of this distinction recently came to be examined by the Hon’ble Supreme Court in Nitendra Kumar Tomer v. Unox S.P.A. and Another[1]. The Hon’ble SC considered whether an appeal filed in the name of a corporate debtor after commencement of the Corporate Insolvency Resolution Process (“CIRP”) could subsequently be cured through amendment and continued by a suspended director after expiry of the limitation period prescribed under Section 61 of the IBC.
Unox S.P.A. (“Operational Creditor”) initiated proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) against Ambro Asia Private Limited (“Corporate Debtor”). The same was admitted vide order dated 18.04.2024 and an Interim Resolution Professional (“IRP”) was appointed by the NCLT, Delhi. Challenging the admission order, an appeal was filed before the National Company Law Appellate Tribunal (“NCLAT”) in the name of Ambro Asia Private Limited and was verified by Nitendra Kumar Tomer, who described himself as the company’s director and authorised representative.
The NCLAT noted that upon commencement of the Corporate Insolvency Resolution Process (“CIRP”), only the IRP could represent the Corporate Debtor. Nevertheless, in the interest of justice, it permitted amendment of the appeal and allowed Mr. Tomer to continue the proceedings in his capacity as a suspended director. The NCLAT subsequently dismissed the appeal on merits, whereupon Mr. Tomer approached the Hon’ble Supreme Court under Section 62 of the IBC.
While examining the challenge to the NCLAT’s judgment, the Hon’ble Supreme Court considered a more fundamental issue, namely, whether the NCLAT could have permitted a wholly incompetent appeal, filed in the name of the Corporate Debtor after commencement of CIRP, to be converted into a maintainable appeal through amendment. The Court observed that the issue went to the very root of maintainability and proceeded to examine the correctness of the approach adopted by the NCLAT.
The issue of filing of an appeal by the esrstwhile director was first addressed in Innoventive Industries Ltd. v. ICICI Bank[2], the Hon’ble SC observed that once an insolvency professional assumes control of the corporate debtor, the erstwhile directors cannot maintain proceedings on behalf of the company. However, given the nascent stage of the insolvency regime at the time, the Court did not dismiss the appeal on this ground alone.
Subsequently, the NCLAT, in several cases, permitted suspended directors to amend appeals filed in the name of the corporate debtor by substituting themselves as appellants. This issue came up for consideration, most recently, in Dhara Cements (India) Pvt. Ltd.[3], where the NCLAT held that an appeal filed in the name of a corporate debtor after commencement of CIRP was not maintainable. The NCLAT further rejected the application seeking amendment of the appeal on the ground that it had been filed beyond the prescribed limitation period.
As a result, the focus prior to Nitendra Kumar Tomer remained on whether the defect had been corrected within limitation. The Supreme Court has now shifted the focus to a more fundamental question whether such an appeal is maintainable at all. By characterising the appeal as “wholly incompetent” from its inception, the Court has clarified that the issue concerns the very existence of the proceeding and not merely the timing of its correction.
Findings of the Supreme Court
A. Effect of Commencement of CIRP on the Authority to Represent the Corporate Debtor
Referring to Section 17(1)(a) of IBC, the Hon’ble SC observed that upon appointment of the IRP, the management of the affairs of the corporate debtor stood vested in the IRP and the powers of the board of directors stood suspended. Consequently, it was held that the suspended director lacked authority to institute an appeal in the name of the corporate debtor after commencement of CIRP.
Having reached the aforesaid conclusion, the Hon’ble Supreme Court proceeded to examine the nature of the defect arising from such filing and whether the same was capable of being cured through amendment.
B. Distinction Between A Defective Appeal And An Incompetent Appeal
A significant aspect of the judgment lies in the distinction drawn by the Hon’ble SC between a defective appeal and an appeal that is “incompetent from its inception.”
A significant aspect of the judgment lies in the distinction drawn by the Hon’ble SC between a defective appeal and an appeal that is “incompetent from its inception.”
Notable, in the present case, the appellant had sought to rely upon authorities dealing with procedural defects, including defects in signing of pleadings, authority of the signatory and description of parties. However, the Hon’ble SC, distinguished such precedents on the ground that they concerned proceedings instituted by parties who possessed the legal authority to institute the proceedings in the first place. The defects in those cases were therefore procedural in nature and capable of subsequent correction.
In contrast, the appeal before the Hon’ble SC had been instituted in the name of the corporate debtor by a suspended director after commencement of CIRP and appointment of the IRP. The Court observed that the defect did not relate to the manner in which the appeal had been presented, but to the very authority of the person instituting it.
Accordingly, the Hon’ble SC held that the appeal was not merely defective but “wholly incompetent” and “not maintainable in its very inception”. The Court specifically rejected the view that the defect could be merely cured by amendment of the cause title or by subsequently substituting the suspended director as the appellant.
The judgment therefore draws a distinction between proceedings suffering from procedural irregularities and proceedings that are fundamentally non-est in law. The Hon’ble SC effectively clarified that the absence of authority to institute proceedings is not a defect in the manner of filing, but a defect going to the very existence of the proceeding itself.
C. Consequences of Treating the Appeal as Incompetent
Having held that the appeal was incompetent from its inception, the Hon’ble SC turned to the consequences of such a finding under Section 61(2) of the IBC. Section 61 prescribes a limitation period of thirty days for filing an appeal before the NCLAT and permits condonation of delay for a further period of fifteen days upon sufficient cause being shown. The Court reiterated the settled position that the NCLAT cannot entertain an appeal beyond this statutory period.
Accordingly, the Hon’ble SC held that the suspended director could not convert an “incompetent appeal” into a maintainable appeal by seeking amendment of the memorandum of appeal after expiry of the prescribed limitation period. The Court held that permitting such an exercise would effectively allow a fresh appeal to be entertained beyond the outer limit prescribed under Section 61. On this basis, the Court found that the NCLAT erred in permitting amendment of the appeal after expiry of the limitation period.
The decision in Nitendra Kumar Tomer clarifies an important aspect of insolvency appellate practice. The Hon’ble SC treated an appeal filed in the name of a corporate debtor by a suspended director after commencement of CIRP as wholly incompetent, rather than merely defective. In doing so, the Court drew a clear distinction between curable procedural defects and defects that go to the very maintainability of the proceeding.
The judgment further underscores the close relationship between maintainability and limitation under Section 61 of the IBC. Once a proceeding is found to be incompetent at its inception, subsequent amendment cannot be permitted to retrospectively validate the filing, particularly after expiry of the prescribed limitation period. The decision is therefore likely to have a significant impact on insolvency appellate practice, particularly in cases where proceedings are instituted by persons lacking authority to represent the corporate debtor after commencement of CIRP.
[1] 2026 SCC OnLine SC 575
[3] Dhara Cements (India) (P) Ltd. v. Dineshbhai Khimjibhai Patel, 2025 SCC OnLine NCLAT 1363.
The article is authored by Mr. JK Chaudhary (Partner), Mr. Nayan Mittal (Senior Associate), Ms.Vanshika Gupta (Associate), Mr. Kanishk Sharma (Assessment Intern)
