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2024 Supreme(Online)(NCLT) 825
NATIONAL COMPANY LAW TRIBUNAL
Mrs. Kalpana Vara Personal Guarantor of Srivardhan Socio Development Foundation – Appellant
Versus
Canara Bank – Respondent
C.P. (IB) - 195/2024
For the Petitioner:Dhruvin Dossani
An application under Section 94 of the IBC is barred by limitation if filed beyond three years from the date of invocation of the personal guarantee.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 94 - Personal Guarantee - Application filed under Section 94(1) for initiating Insolvency Resolution Process against personal guarantor - The application was dismissed as it was filed beyond the limitation period of three years from the date of invocation of the guarantee. (Paras 1, 10, 16)
(B) Limitation Act, 1963 - Applicability - The provisions of the Limitation Act apply to proceedings under the IBC, and the right to sue accrues upon default. (Paras 9, 13)
(C) Judicial Precedents - The Supreme Court's ruling in 'B.K. Educational Services (P) Limited vs. Parag Gupta & Associates' clarifies that the Limitation Act is applicable to applications under the IBC. (Paras 9, 15)
Facts of the case:
The applicant, a personal guarantor for a corporate debtor, filed an application for initiating the Insolvency Resolution Process after the corporate debtor defaulted on loans. The application was filed long after the guarantee was invoked.
Findings of Court:
The court found that the application was filed beyond the three-year limitation period from the date of invocation of the guarantee, leading to dismissal.
Issues: The main issues were whether the application was filed within the limitation period and the applicability of the Limitation Act to the case.
Ratio Decidendi: The court ruled that the application was barred by limitation as it was filed more than three years after the guarantee was invoked, emphasizing the importance of timely filing under the IBC.
Result: Petition dismissed.
The case is fixed for pronouncement. The order is pronounced in the open court, vide separate sheet.
- ........Applicant ........Respondent Order delivered on: 06/06/2024 Coram:
- Mr. Shammi Khan, Hon’ble Member(J) Mr. Sameer Kakar, Hon’ble Member(T) Kalpana Vara vs Canara Bank & Anr 1 of 12 BEFORE THE ADJUDICATING AUTHORITY NATIONAL COMPANY LAW TRIBUNAL, DIVISION BENCH – I, AHMEDABAD CP/IB/195/AHM/2024 Filed under Section 94 of the Insolvency & Bankruptcy Code, 2016 In the matter of Mrs. Kalpana Vara Mrs. Kalpana Vara, Personal Guarantor of Srivardhan Socio Development Foundation Address: E6, Heritage Apartment, Nr. Raj Tower, Mandav Road, Dahod - 389151 … Applicant VERSUS
1. Canara Bank, Anand Branch, Station Road, Gamdi Vad, Anand, Gujarat – 388001 …Respondent No.1
2. M/s MAS Financial Services Limited, 6, Ground Floor, Narayan Chambers, B/h Patang Hotel, Ashram Road, Ahmedabad – 380009 …Respondent No. 2 Order pronounced on: 06.06.2024 CORAM:
- SH. SHAMMI KHAN, HON’BLE MEMBER (JUDICIAL) SH. SAMEER KAKAR, HON’BLE MEMBER (TECHNICAL) APPEARANCE:
- For Applicant : Mr. Masoom Shah Adv a.w. Mr. Dhruvin. N. Dossani, Adv. Kalpana Vara vs Canara Bank & Anr 2 of 12 O R D E R
1. The Present Application is filed on 24.04.2024 under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as "IBC, 2016") r/w Rule 6 (1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtor) Rules, 2019 to initiate the Insolvency Resolution Process (hereinafter referred to as "IR Process")
against the Applicant who is the Personal Guarantor of Corporate Debtor M/s Srivardhan Socio Development Foundation for a default amount of Rs.63,41,351/- along with 12% interest from 21.03.2013 and Rs. 3,82,35,199/- along with 15% interest from date of filling of suit till judgement and 9% per annum thereafter in relation to the credit facility extended by the Respondents namely the Canara Bank and M/s MAS Finance Limited to the Corporate Debtor.
2. The brief facts of case are as under:-
- i.
- The corporate debtor M/s Srivardhan Socio Development Foundation is a Micro Finance Kalpana Vara vs Canara Bank & Anr 3 of 12 Institution (MFI) engaged in the business of providing micro-finance to poor and marginalized section of society. The corporate debtor was concentrated towards providing loans to underprivileged segment, more specifically women from backward communities, enabling them to start their business and sustain a decent life and help in nation-building.
- ii.
- On 08.07.2008 the corporate debtor availed advance facilities from Canara Bank for which the applicant assumed the role of personal guarantor on behalf of the corporate debtor for a sum of Rs. 50,00,000.00 along with the applicable interest. The guarantee agreement dated 08.07.2008 is being annexed hereto as Annexure-F.
- iii.
- Further on 05.10.2009, the applicant further committed to the role of personal guarantor for the corporate debtor where by the limit of personal guarantee was increased to Rs. 1,00,00,000. The copy of the guarantee agreement dated 05.10.2019 is being annexed hereto as Annexure-I.
- Kalpana Vara vs Canara Bank & Anr 4 of 12 iv.
- In January 2013 the corporate debtor availed a term loan from M/s MAS Finance Limited for an amount of Rs. 2,95,00,000 for which the applicant stood as a personal guarantor along with co-guarantor.
- v.
- On 11.01.2013, the Canara Bank classified the account of the Corporate Debtor as a non-performing asset (NPA).
- vi.
- On 21.10.2013, Canara Bank initiated legal proceeding by filling an Original Application bearing no. 101 of 2013 before the Debt Recovery Tribunal II, at Ahmedabad for recovery of Rs. 63,41,351/- against the corporate debtor and the personal guarantors.
- vii.
- On 08.07.2015, the Debt Recovery Tribunal II at Ahmedabad passed a decree in favour of Canara Bank and against the corporate debtor as well as the personal guarantors and a recovery certificate for an amount of Rs.63,41,351/- w
