Limitation against personal guarantor under on-demand guarantee deed commences from date of demand notice invoking guarantee, not principal borrower's default date. Section 95 applications filed within three years from demand held within limitation.

JUDGMENT

Ashok Bhushan, J.

These two appeals have been filed by the Personal Guarantors of the Corporate Debtor challenging two orders of the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench – I dated 04.06.2024 and been filed challenging order passed by NCLT, Mumbai Bench – I dated 04.06.2024 in C.P. (IB) No.1195/MB/2020 by which order application under Section 95 filed by the State Bank of India against the Appellant – Rajkumar Nandlal Dhoot, Personal Guarantor has been admitted. Company Appeal (AT) (Ins.) No.1444 of 2024 has been filed challenging order dated 14.06.2024 passed by NCLT, Mumbai Bench – I in C.P. (IB) No.1198/MB/2020 by which order Section 95 application filed by the State Bank of India against the Appellant – Pradeep Nandlal Dhoot, Personal Guarantor has been admitted. These two appeals were heard together and are being decided by this common judgment.

2. Both the appeals arise out of similar facts and raises common question of facts and law. Brief background facts necessary to be noticed for deciding these appeals are:

(i) The Corporate Debtor – Videocon Industries Ltd. availed Rupee Term Loan facilities from the State Bank of India on 31.05.2010. The Rupee facilities agreement, Supplemental Working Capital Consortium Agreement dated 25.05.2012 were executed. The Personal Guarantors had guaranteed due repayment of facilities vide Deed of Guarantee dated 08.08.2012. Rajkumar Nandlal Dhoot as well as Pradeep Nandlal Dhoot executed Personal Guarantee Deed on 08.08.2012 and Fourth Supplemental Joint Deed of Guarantee dated 25.05.2012.

(ii) State Bank of India vide notice dated 05.03.2016 demanded the Principal Borrower – Videocon Industries Ltd. to pay amount due under RTL agreement and Working Capital Facility Agreement. Default was committed by the Principal Borrower – Videocon Industries Ltd. The State Bank of India issued demand notice to the Principal Borrower on 18.01.2018 with regard to RTL facility and on 23.01.2018 in respect of working capital facility. The application under section 7 was filed against the Principal Borrower - Videocon Industries Ltd. CIRP against the Videocon Industries Ltd. commenced on 06.06.2018.

(iii) Demand Certificates were issued on 02.02.2018, which demand certificate were issued to both the Appellants demanding payment of dues. In the demand notice dated 02.02.2018, an amount of Rs.3171.37 Crores was demanded with respect to obligation made as per Rupee Term Loan Agreement. By another demand notice dated 20.02.2018 issued to both Appellants herein a demand was made with regard to Working Capital Consortium Agreement. An amount of Rs.795.57 Crore was claimed to be in default.

(iv) On 23.07.2020 notice in Form B under Rule 7(1) of Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 was issued to the Appellant – Mr. Rajkumar Nandlal Dhoot claiming payments of Rs.53,53,78,13,936/- as on 14.05.2020 and similarly a demand notice dated 23.07.2020 was issued to Mr. Pradeep Nandlal Dhoot in Form B.

(v) Appellants having not made payment, application C.P. (IB) No.1195/MB/2020 was filed under Section 95 by the State Bank of India against Rajkumar Nandlal Dhoot whereas State Bank of India filed application C.P. (IB) No.1198/MB/2020 against Pradeep Nandlal Dhoot.

(vi)