Acknowledgement of debt by principal borrower via OTS proposals extends limitation for personal guarantor's Section 95 proceedings under IBC, binding co-extensively despite 'without prejudice' marking when read holistically.

ORDER

(Hybrid Mode)

[ORAL JUDGMENT: Justice Sharad Kumar Sharma, Member (Judicial)] 06.02.2026:

Under question, in the instant company appeal, is the impugned order of 11.09.2025, that was passed by the Ld. NCLT Chennai, in a proceeding that were held in the shape of CP (IB) l l/CHE/2022, having a resultant bearing, of an admission of Section 95 proceedings of the I & B Code, 2016, as against the present Appellant, who stood as a Personal Guarantor to the loan advances, that were extended by the Respondent No. 1/Financial Creditor, i.e., SBI to the Corporate Debtor, i.e., M/s. Ennore Coke Ltd.

2. A consortium of Financial Creditors, namely the State Bank of India, State Bank of Hyderabad, Union Bank of India and the Indian Overseas Bank, who were individually referred, as to be the lenders are said to have extended financial assistance to M/s. Ennore Coke Limited (the Corporate Debtor), a public limited company, which stood incorporated thus with its legal status in accordance with the provisions of the Companies Act of 1956. As per the request made by the principal borrower/Corporate Debtor, the lenders are shown to have agreed for a disbursement of a sum of Rs. 36.45 Crores, with a return payable thereafter together with interest, cost, charges, expenses and all other amounts that would be falling due to be paid to the lenders.

3. The condition for disbursement of the loan was governed under conditions as expressed by the Financial Creditors, was that, the guarantor who was also the promoter of the Corporate Debtor would be bound to furnish the guarantee, thereby guaranteeing the due repayment of loan advances, by the borrower of the said amount as extended by way of financial assistance to the Corporate Debtor by the consortium of Financial Creditors, if the principal borrower (i.e., the Corporate Debtor) defaulted the re-payment of loan.

4. The covenants of the said deed of Personal Guarantee as it stood executed inter se between the parties on 10.02.2012, its an admitted fact, which is not in controversy, and it goes without saying too that under the contracting laws the terms of said guarantee agreement will have an inter-se binding effect, qua the aspects relating to governing the rights and liabilities, under the lending contract, as agreed to be settled between the Corporate Debtor; Personal Guarantor and the Financial Creditors, who were admittedly the joint signatories to the guarantee deed, which was witnessed by the Financial Creditor, as well as, by the Corporate Debtor.

5. In accordance with the terms of the Guarantee Deed dated 10.02.2012, the Appellant was under an obligation to meet the financial liabilities, as occurring thereunder against the Corporate Debtor, owing to the default that, has been committed by them on account of the non-remittance of the amount of financial assistance thus taken by the Corporate Debtor. The case before the Ld. Adjudicating Authority had been that, owing to the admitted default as it had occurred in the books of account of the Corporate Debtor, the Financial Creditor had proceeded to classify the account of the Corporate Debtor as a Non- Performing Asset, by an order passed in that regard on 28.10.2015.

6. It is this cut-off period, which will be the bone of contention in the instant company appeal