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2026 Supreme(Online)(NCLT) 3563
NATIONAL COMPANY LAW TRIBUNAL
Sanjiv Dutt, Technical Member, Ashish Kalia, Judicial Member
Kanchan Shyamsunder Jangid – Appellant
Versus
Reliance Asset Reconstruction Company Limited – Respondent
C.P. (IB)/137(MB)2026
Important Points
Subject
Insolvency and Bankruptcy - Personal Guarantor Insolvency
Act Referred
Insolvency and Bankruptcy (Application to the Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019: R.6
SARFAESI Act, 2002: S.13(2)
Limitation Act, 1963: Art.137, S.18, S.19
Headnote
Facts of the case:
The petitioner filed an application under Section 94(1) of the Code seeking to initiate an insolvency resolution process, claiming inability to pay debts as a personal guarantor for a corporate debtor. Multiple recovery proceedings under the SARFAESI Act and before the Debt Recovery Tribunal had been pending against the petitioner since 2015/2016, following the classification of loan accounts as non-performing assets.
Findings of Court:
The court observed that the debt was recalled in 2015 and 2019, making the 2026 filing significantly beyond the three-year limitation period. The court further noted the petitioner's history of multiple litigations and deemed the current petition an abuse of the court process intended to stall recovery actions sanctioned by the High Court.
Issues: Whether the application under Section 94(1) of the Code was maintainable, within the period of limitation, and filed with a bona fide intent.
Ratio Decidendi: An application under Section 94 of the Code cannot be used as a device to obstruct legitimate recovery proceedings. The period of limitation under Article 137 of the Limitation Act is three years from the accrual of the right to apply, which had expired. Litigants failing to come with clean hands and abusing the court process for delay are liable to be dismissed at any stage.
Result: Petition dismissed.
For the Appellants/Petitioners: Prachi Wazalwar, Omkar Kanegaonkar, Swapnil Balajiwale, Nihal Lakhan
For the Respondents: Ajinkya Kurdukar
| Table of Content |
|---|
| 1. basis of filing insolvency petition by personal guarantor. (Para 1 , 2 , 3 , 4 , 5) |
| 2. financial creditor's objections regarding maintainability and limitation. (Para 6 , 7 , 8 , 9 , 10) |
| 3. court deliberation on limitation and abuse of judicial process. (Para 11 , 12 , 13 , 14) |
IBC Under Section 94(1)
ORDER
The present petition stands dismissed. A detailed order will follow.
Sd/-
SANJIV DUTT
MEMBER (TECHNICAL)
Sd/-
ASHISH KALIA
MEMBER (JUDICIAL)
IN THE NATIONAL COMPANY LAW TRIBUNAL
MUMBAI BENCH-II
C.P. (IB)/137(MB)2026
[Under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to the Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019]
Ordered On: 22.04.2026
IN THE MATTER OF:
Kanchan Shyamsunder Jangid
Personal Guarantor of Balaji Cars Private Limited
... Petitioner/ Personal Guarantor
CORAM:
HON’BLE SHRI ASHISH KALIA, MEMBER (JUDICIAL)
HON’BLE SHRI SANJIV DUTT, MEMBER (TECHNICAL)
Appearances: Hybrid
For Petitioner: Adv. Prachi Wazalwar a/w Adv. Omkar Kanegaonkar, Adv. Swapnil Balajiwale and Adv. Nihal Lakhan i/b Adv. Nihal Lakhan (VC)
For Respondent : Adv. Ajinkya Kurdukar (VC)
ORDER
Per: CORAM
Background
1. This present Company Petition has been filed on 17.01.2026 by Smt. Kanchan Shyamsundar Jangid (hereinafter referred to as the “Applicant/Personal Guarantor”) under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “the Code”) read with Rule 6 (1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, seeking initiation of Insolvency Resolution Process in respect of herself. The Applicant claims to be a Personal Guarantor to Balaji Cars Private Limited (hereinafter referred to as the “Corporate Debtor”) and has approached this Adjudicating Authority on the ground that she is unable to discharge the financial liabilities arising out of the guarantees furnished by her in favour of the lenders of the Corporate Debtor.
2. The Applicant submits that The Kalyan Janata Sahakari Bank Limited had sanctioned credit facilities aggregating to Rs. 3,00,00,000/- in favour of the Corporate Debtor vide sanction letter dated 29.02.2012. In consideration thereof, the Applicant executed deeds of guarantee and undertook liability for repayment of the dues in the event of default by the Corporate Debtor. The Applicant states that the loan account of the Corporate Debtor became irregular and was ultimately classified as a Non-Performing Asset with effect from 31.05.2015. Consequently, the Original Financial Creditor initiated recovery proceedings under the provisions of the SARFAESI Act, 2002 and issued a demand notice under Section 13(2) thereof on 16.07.2015 for recovery of the outstanding dues.
3. It is further submitted that the aforesaid loan account was subsequently assigned by The Kalyan Janata Sahakari Bank Limited in favour of Reliance Asset Reconstruction Company Limited through an Assignment Agreement dated 27.07.2018. Thereafter, Reliance Asset Reconstruction Company Limited initiated fresh recovery proceedings and issued a demand notice dated 05.07.2019 under Section 13(2) of the SARFAESI Act, 2002 . The Applicant states that a sum of Rs. 3,21,99,094/- as on 31.08.2020, together with further interest, costs and charges, remains due and payable by her in her capacity as Personal Guarantor in respect of the said facility. The Applicant has also stated that Reliance Asset Reconstruction Company Limited has instituted Original Application No. 441 of 2020 before the Debt Recovery Tribunal-III, Mumbai, which is stated to be pending adjudication.
4. The Applicant further submits that she is also a co-borrower and guarantor in respect of a housing finance facility of Rs. 3,00,00,000/- sanctioned by LIC Housing Finance Limited on 28.03.2014. According to the
