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2026 Supreme(Online)(NCLT) 383
NATIONAL COMPANY LAW TRIBUNAL
MANNI SANKARIAH SHANMUGA SUNDARAM, Judicial Member, ATUL CHATURVEDI, Technical Member
THE CANARA BANK LIMITED – Appellant
Versus
SURYA KANT JAIPURIA – Respondent
IA (I.B.C)/883(ND)2024 | IA (I.B.C)/4716(ND)2024 | IA (I.B.C)/232(ND)2024 | C.P. (IB)/9(ND)2023
For the Applicant: Mr. Arun Kumar Shukla, Mr. Naman Shukla, Mr. Navin kumar, Advs.
For the Respondent: Mr. Vivek Kumar Ranghera, Adv.
For the RP: Mr. Brijesh Kumar Tamber, Mr. Prateek Kushwaha, Advs., Mr. Anil Kumar Mittal, RP in person
Section 95 application against personal guarantor barred by limitation if filed beyond 3 years from default without debt acknowledgment; liquidation proceeds from corporate debtor do not extend limitation period.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 95(1), 96, 99 - Limitation Act, 1963 - Article 137, Sections 18, 19 - Personal guarantee enforcement - Application under Section 95 filed beyond three years from default date (90 days prior to NPA declaration on 27.09.2017) and guarantee invocation on 09.03.2018 - No acknowledgment of debt placed on record - Receipt of liquidation proceeds by financial creditor from corporate debtor does not constitute acknowledgment under Section 18 extending limitation - COVID-19 extension (15.03.2020 to 28.02.2022) insufficient to save application filed on 10.11.2022 - Petition held barred by limitation despite RP's recommendation for admission. (Paras 5, 9, 13, 14, 15, 19)
(B) Insolvency and Bankruptcy Code, 2016 - Sections 33, 54, 60 - Post-liquidation proceedings against personal guarantor - Once corporate debtor liquidated and assets distributed, Section 95 application amounts to recovery proceeding, not resolution - NCLT not forum for debt recovery; jurisdiction shifts to DRT. (Paras 17, 18)
(C) Personal guarantee - Disputed facts on unauthorized facility extensions post-sanction expiry, adjustment of recoveries, interest computation - Such issues involve factual disputes not adjudicable summarily by NCLT. (Para 16)
Facts of the case:
Financial creditor sanctioned working capital facilities to corporate debtor, guaranteed by personal guarantor. Account declared NPA on 27.09.2017 (default 29.06.2017), guarantee invoked 09.03.2018. Corporate debtor underwent CIRP (admitted 06.03.2018), liquidation (01.02.2019), dissolution (01.07.2021). Creditor received ₹19.92 crores in liquidation proceeds by 2020. Section 95 application filed 10.11.2022 claiming ₹24.07 crores outstanding. RP recommended admission; guarantor objected on limitation, suppression, jurisdiction.
Findings of Court:
No valid acknowledgment; liquidation proceeds not acknowledgment; application time-barred; RP report rejected; proceedings not for resolution but recovery post-liquidation.
Issues: Whether Section 95 application within limitation; whether liquidation proceeds extend limitation; NCLT jurisdiction post-corporate debtor dissolution; summary adjudicability of disputed debt quantum.
Ratio Decidendi: Limitation for Section 95 applications is three years from default under Article 137; requires explicit acknowledgment under Section 18 - statutory distributions in liquidation do not qualify; IBC not recovery mechanism post-liquidation of principal debtor.
Result: Section 95 application dismissed as barred by limitation; RP report rejected; guarantor's objection allowed.
| Table of Content |
|---|
| 1. initiation of pg insolvency and rp report submission. (Para 1) |
| 2. rp recommends admission; liquidation credits applied. (Para 2) |
| 3. pg challenges petition as recovery abuse. (Para 3) |
| 4. court reviews facts and limitation issue. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 5. application barred by limitation; no valid acknowledgment. (Para 11 , 12 , 13 , 14 , 15) |
| 6. disputed facts and misuse of ibc for recovery. (Para 16 , 17 , 18) |
| 7. dismissal of section 95 application as time-barred. (Para 19 , 20) |
ORDER
PER: ATUL CHATURVEDI, MEMBER (TECHNICAL)
1. The present petition is filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 by Canara Bank for initiation of Insolvency Resolution Process qua the Respondent/Personal Guarantor i.e., Mr. Surya Kant Jaipuria. This Adjudicating Authority vide order dated 21.12.2023 initiated Interim Moratorium under Section 96 of the Code and appointed Mr. Anil Kumar Mittal bearing registration no. IBBI/IPA- 002/IP-N00742/2018-2019/12263 as the Resolution Professional to submit a Report within a stipulated time as per Section 99 of the Code. In compliance of order dated 21.12.2023, the Resolution Professional submitted a report under section 99 of the Code through IA/883/ND/2024. However, since the report was found to be under defect, the RP refiled its report under section 99 of the Code through IA (I.B.C)/4716(ND)2024.
2. FACTS OF THE CASE
a. The Canara Bank, vide its Sanction Letter dated 28.02.2015, bearing Reference No. SYNB/NOTICE/ICPL/2018, sanctioned various Working Capital Facilities in favour of the Corporate Debtor, M/s Integrated Caps Pvt. Ltd., aggregating to ₹33,95,43,000/- (Rupees Thirty-Three Crores Ninety-Five Lakhs Forty-Three Thousand only). The said facilities were stipulated to fall due for repayment on or before 27.09.2017.
b. It is submitted that the Corporate Debtor defaulted in the repayment of the Working Capital Facilities sanctioned by Canara Bank and, consequently, the loan accounts were classified as Non- Performing Assets (NPA) on 27.09.2017. Pursuant to the default, Canara Bank, vide its Guarantee Invocation Notice dated 09.03.2018 bearing No. SYNB/NOTICE/ICPL/2018, invoked the personal guarantee furnished by the Personal Guarantor and called upon him to discharge the outstanding dues under the said facilities. Thereafter, Canara Bank, through its Demand Notice in Form B dated 22.07.2022 issued to the Personal Guarantor, once again demanded repayment of the amounts due and payable under the sanctioned facilities.
c. It is submitted that a Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 was filed by Shri Bal Pratap Srikent against the Corporate Debtor, M/s Integrated Caps Private Limited, and the said Petition, bearing C.P. (IB) 74/ND/2018, was admitted by this Tribunal (New Delhi, Court–IV) vide Order dated 06.03.2018, thereby commencing the Corporate Insolvency Resolution Process (“CIRP”). Subsequently, an Application under Section 33 of the Code was filed by the Resolution Professional seeking initiation of the Liquidation Process of the Corporate Debtor, which was allowed by this Bench vide Order dated 01.02.2019.
d. The Applicant stated that an application under Section 54 of the Code was filed by the Liquidator of M/s Integrated Caps Private Limited seeking dissolution of the Corporate Debtor, which was allowed by this Bench vide Order dated 01.07.2021.
e. Canara Bank has claimed a total debt of ₹24,07,59,668.25 in its application filed under Section 95 of the Insolvency and Bankruptcy Code, 2016. In terms of Section 99 of the Code, the Resolution Professional is required to submit a report within ten working days of appointment, recommending admission or rejection of the said application. Pursuant thereto, the Resolution Professional called upon the Personal Guarantor, Mr. Surya Kant Jaipuria, to furnish proof and details of any repayment made to Canara Bank, by e-mail dated 29.12.2023 and by courier dated 28.12.2023.
f. The Personal
