Case Note & Summary
The appeal was filed by the personal guarantor against an order of the National Company Law Tribunal, which dismissed her petition under Section 94 of the Insolvency and Bankruptcy Code, 2016, on the grounds of limitation. The appellant, Kanta Gupta, had guaranteed loans taken by the corporate debtor, OSIL Exports Limited, which defaulted on its obligations. The Bank of India, as the lead bank, initiated proceedings under the Insolvency and Bankruptcy Code, leading to the corporate debtor's liquidation. The appellant contended that the limitation period for her application had not expired, as she had submitted one-time settlement proposals that should extend the limitation period under Section 18 of the Limitation Act. However, the respondents argued that the application was filed after the limitation period had lapsed, and the acknowledgment of liability could not be used by the appellant to extend the limitation period. The court analyzed the provisions of the Limitation Act and concluded that the acknowledgment must be made by the creditor, not the debtor, to extend the limitation period. Ultimately, the court upheld the tribunal's decision, stating that the application was indeed barred by limitation and dismissed the appeal.
Headnote
A) Insolvency Law - Personal Guarantee - Limitation Period - Insolvency and Bankruptcy Code, 2016, Section 94 - The application under Section 94 was dismissed as it was filed beyond the limitation period, which commenced from the invocation of the personal guarantee. The court held that the acknowledgment of liability by the debtor cannot extend the limitation period for the guarantor (Paras 38-44).
Issue of Consideration
Whether the application filed under Section 94 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.
Final Decision
The appeal and IA No. 4477 of 2026 were dismissed as the application under Section 94 was found to be barred by limitation. The court upheld the tribunal's decision, stating that the acknowledgment of liability must be made by the creditor to extend the limitation period.
Law Points
- Insolvency and Bankruptcy
- Limitation Act
- Personal Guarantee
- Acknowledgment of Liability
- SARFAESI Act
Case Details
2026 LawText (NCLAT) (08) 7
CA (AT) (Ins) No. 1058 of 2026
Justice Mohd. Faiz Alam Khan, Naresh Salecha
Mr. Krishnendu Datta, Mr. Neeraj Malhotra, Mr. Nipun Gautam, Mr. Harsh, Mr. Vadlamani Seshagiri, Mr. Christy Nameirakpam, Mr. Ananya Kukreti, Ms. Deepanshi Kaushik, Ms. Eshna Kumar, Ms. Astha Agrawal, Mr. Sandeep Bajaj, Mr. Akshit Awasthi, Mr. Mayank Biyani, Ms. Tanishka Kapoor
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Nature of Litigation
Appeal against dismissal of petition under Section 94 of the Insolvency and Bankruptcy Code, 2016.
Remedy Sought
Appellant sought to challenge the dismissal of her petition under Section 94.
Filing Reason
Petition was dismissed on grounds of being barred by limitation.
Previous Decisions
The petition under Section 94 was dismissed by the National Company Law Tribunal.
Issues
Whether the application under Section 94 was barred by limitation.
Whether the acknowledgment of liability can extend the limitation period for the guarantor.
Submissions/Arguments
Appellant argued that the limitation period had not expired due to one-time settlement proposals.
Respondents contended that the application was filed after the limitation period and that the acknowledgment could not be used by the appellant.
Ratio Decidendi
The limitation period for filing an application under Section 94 of the Insolvency and Bankruptcy Code commences from the invocation of the personal guarantee, and the acknowledgment of liability must be made by the creditor to extend the limitation period.
Judgment Excerpts
The application under Section 94 was dismissed as it was filed beyond the limitation period.
The acknowledgment of liability by the debtor cannot extend the limitation period for the guarantor.
The petition filed under Section 94 of the Code in the year 2025, is barred by limitation and deserves to be rejected.
Procedural History
The appellant filed a petition under Section 94 of the Insolvency and Bankruptcy Code, which was dismissed by the National Company Law Tribunal on grounds of limitation. The appellant then appealed to the National Company Law Appellate Tribunal.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016: Section 94
- Limitation Act, 1963: Section 18, Article 137
- SARFAESI Act, 2002: Section 13(2), Section 13(4)
