2026 Supreme(Online)(NCLT) 177

NATIONAL COMPANY LAW TRIBUNAL
Umesh Kumar Shukla, Technical Member, Kishore Vemulapalli, Judicial Member
Canara Bank – Appellant
Versus
Thota Kanna Rao – Respondent
IA (IBC)/421/2025 in CP (IB)/4/95/AMR/2025|CP (IB)/4/95/AMR/2025

Notices under guarantee to personal guarantor's last known/updated addresses validly served; limitation extended by recovery certificate, OTS acknowledgements, COVID exclusion; compliant Section 95 petition against personal guarantor admitted on RP report.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 95, 96, 99, 100, 101, 102, 104, 105, 106, 107, 108, 109, 110, 111, 112 - Personal Insolvency Resolution Process - Sections 60(2), 60(5) - NCLT Rules, 2016 - Rule 11 - Application by financial creditor against personal guarantor to corporate debtor - Account classified as NPA on 31.08.2017 - Recall notice invoking guarantee served at updated address on 05.10.2017 - Demand notice in Form B served at further updated address on 02.05.2024 for debt exceeding Rs.1 Crore threshold - Guarantee agreement clauses deeming notices served at last known address valid - RP report under Section 99 confirming compliance and recommending admission - Limitation extended by recovery certificate, OTS offers acknowledging debt, and COVID exclusion period - Petition filed within limitation - IA seeking additional service proofs allowed - No representation by personal guarantor despite substituted service - Petition admitted, moratorium imposed under Section 101, RP directed to issue public notice and process claims. (Paras 13, 14, 15, 16, 18)

(B) Limitation - Computation - NPA declaration, recall notice (cause of action), SARFAESI notice, DRT recovery certificate before expiry restarts period - OTS offers constitute debt acknowledgement extending limitation - Supreme Court COVID orders exclude 15.03.2020 to 28.02.2022 (715 days) - Petition within extended period upheld. (Para 14)

(C) Guarantee Agreement - Interpretation - Continuing, unconditional, irrevocable guarantee for all loans - Notices deemed served at last known/updated address per clause - Guarantor liable as principal debtor despite variations, extensions, or securities - Authorisation to principal borrower for acknowledgements binding on guarantor. (Paras 13, 15)

Facts of the case:
Financial creditor advanced cash credit facility secured by hypothecation and personal guarantee dated 13.02.2014. Account became NPA on 31.08.2017. Recall notice, SARFAESI proceedings, DRT recovery certificate, rejected OTS offers, and Form B demand notice issued. Personal guarantor updated addresses twice. Petition e-filed 30.12.2024. RP confirmed compliance. No response from personal guarantor despite notices including substituted service.

Findings of Court:
Notice invoking guarantee duly served at updated address; petition within limitation; personal guarantor liable under guarantee clauses; demand notice served for debt beyond threshold; RP report acceptable - PIRP initiated, moratorium under Section 101, RP to issue notices and prepare creditor list/repayment plan process.

Issues: Whether notice invoking guarantee served; petition within limitation; personal guarantor liable under agreement; demand notice duly served beyond threshold; acceptability of RP report under Section 99.

Ratio Decidendi: Notices to personal guarantor at last known/updated addresses per guarantee clause validly served; limitation restarts/extends via recovery certificate, debt acknowledgements, COVID exclusion; unconditional continuing guarantee binds guarantor as principal debtor; Section 95 petition admitted on RP recommendation if compliant.

Result: IA allowed; CP admitted.

Table of Content
1. jurisdiction under ibc section 60(2) (Para 1 , 2)
2. corporate debtor loan default facts (Para 3)
3. procedural history and notices (Para 4)
4. rp confirms limitation compliance (Para 5)
5. substituted service on guarantor (Para 6 , 7 , 8)
6. additional documents on record (Para 9 , 10 , 11)
7. notice service via last known address (Para 12 , 13)
8. petition within limitation period (Para 14)
9. guarantor's unconditional liability (Para 15)
10. demand notice duly served (Para 16)
11. rp recommendation; petition admitted (Para 17 , 18)
12. pirp initiation and directions (Para 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26)

IN THE NATIONAL COMPANY LAW TRIBUNAL AMARAVATI BENCH (Through Hybrid Mode)

Item No.2 IA (IBC)/421/2025 in CP (IB)/4/95/AMR/2025 IN THE MATTER OF:

Canara Bank … Petitioner/Creditor Versus Mr. Thota Kanna Rao, PG of M/s Sri Krishna Stockist & Traders Pvt Ltd … Respondents Under Section: 95, 60(5) of IBC, 2016 Rule: 11 of NCLT Rules, 2016 Order delivered on 09.01.2026 CORAM:

SHRI UMESH KUMAR SHUKLA SHRI KISHORE VEMULAPALLI HON’BLE MEMBER (TECHNICAL) HON’BLE MEMBER (JUDICIAL)

PRESENT:

For Financial Creditor : Mr. Dishit Bhattacharjee, Adv.

For Personal Guarantor :

For Resolution Professional : Mr. M. Ramarao, Adv.

ORDER Orders pronounced and recorded vide separate sheets. IA (IBC)/421/2025 is allowed and disposed of. CP (IB)/4/95/AMR/2025 is admitted.

Sd/- Sd/-

(UMESH KUMAR SHUKLA) (KISHORE VEMULAPALLI)

MEMBER (TECHNICAL) MEMBER (JUDICIAL)

Mohan (Steno) & RSN (PS)

IN THE NATIONAL COMPANY LAW TRIBUNAL AMARAVATI BENCH AT MANGALAGIRI (Exercising powers of Adjudicating Authority under The Insolvency and Bankruptcy Code, 2016) IA (IBC)/421/2025 in CP (IB)/4/95/AMR/2025 And CP (IB)/4/95/AMR/2025 Application under Section 95 r/w Section 60(2) of Insolvency and Bankruptcy Code, 2016 read with Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 In CP (IB)/4/95/AMR/2025 & IA (IBC)/421/2025:

Canara Bank Head Office situated at 112, Jayachamarajendera Road, Bangalore -560002 Having its branches amongst other places at Stressed Assets Management Branch, # 1-7-1, T.S.R. Complex, 2nd Floor, S.P. Road, Secunderabad-500003.

Represented by its Chief Manager Koka Sivanadh, S/o. Sri Suryanarayana Rao ……………………….… Financial Creditor AND

1. Shri Thota Kanna Rao S/o Subba Rao (late)

The Personal Guarantor of M/s Sri Krishna Stockist and Traders Pvt. Ltd., Plot No. 101, Venkata Ramana Residency, Near Kandukuri Veereshalingam Asthika kalasha, Y Junction, Rajahmundry, District East Godavari-533103, Andhra Pradesh.

……………………. Personal Guarantor

2. M/s. Sri Krishna Stockist & Traders Pvt. Ltd.

having its Registered Office situated at 1-8-5 Kovvur Mandal, I Pangidi village, West Godavari-534342, Andhra Pradesh. ……………………….... Corporate Debtor Order delivered on: 09.01.2026 Coram: HON’BLE SHRI KISHORE VEMULAPALLI, MEMBER (JUDICIAL)

HON’BLE SHRI UMESH KUMAR SHUKLA, MEMBER (TECHNICAL)

Parties/Counsels Appearance:

For Financial Creditor : Mr. Dishit Bhattacharjee, Adv.

For Personal Guarantor :

For Resolution Professional : Mr. M. Ramarao, Adv.

ORDER

PER: BENCH The present Company Petition bearing No. CP (IB)/4/95/AMR/2025 (hereinafter referred to as the “Petition”) has been e-filed on 30.12.2024 and physically filed on 20.12.2024 vide Diary No. 1804, by the Canara Bank (hereinafter referred to as the “Financial Creditor”) through its Chief Manager, Shri Koka Sivanadh, under Section 95 and Section 60(2) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “IBC” or “Code”) read with Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 (hereinafter referred to as the “Personal Guarantors Rules”) seeking to initiate Personal Insolvency Resolution Process (hereinafter referred to as the “PIRP”) against Shri Thota Kanna Rao (hereinafter referred to as the

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