Amita Kiran Sheth vs Respondents
- CitationCompany Appeal (AT) (Ins) No. 675 of 2025
Ratio decidendi
The rule this decision rests on
The Appellate Tribunal upheld the dismissal, as time-barred under the Limitation Act's three-year period, of an application under Section 94 of the Insolvency and Bankruptcy Code filed against a personal guarantor, where the creditor's invocation of the guarantee by a notice dated 18.07.2016 meant the limitation period expired on 17.07.2019 and the application was filed in 2023. The dismissal of an application under Section 94 as barred by limitation does not preclude the applicant from raising, in the pending proceedings before the Debt Recovery Tribunal or any other proceedings in accordance with law, such defences as remain available to it.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Arnita Kiran Sheth ...Appellants Versus ---- ...Respondents
Present: For Appellant : Mr. Yahya Batatawala, Advocate. For Respondents : None.
ORDER
(Hybrid Mode)
25.09.2025: Heard counsel for the Appellant.
2. This appeal has been filed against the order dated 11.03.2025 by which
order Adjudicating Authority has rejected Section 94 application filed by the
appellant. Appellant claims to be Personal Guarantor of the Corporate Debtor
(Max Flex). An additional-affidavit has been filed by the appellant where
appellant has pleaded that in para-5 (a) & (b) which are as follows:-
"5. The Appellant submits that the Impugned Order deciding on the issue of limitation and holding that the Company Petition is barred by limitation is erroneous and incorrect for the following reasons:
a. The Appellant is the Personal Guarantor to the facilities availed by the Corporate Debtor, Max Flex and Imaging Systems Limited.
b. SBI Cap Trustee Ltd., the Financial Creditor, invoked the guarantee by issuing a Notice dated 18/07/2016 under Section 13(2) of the SARFAESI Act (Pg 3171 Vol. 2 of the Appeal)."
The Section 13(2) notice having been invoked on 18.07.2016 three years
period came to an end on 17.07.2019 and the application was filed in the year
2023 which has been dismissed as barred by time.
3. Counsel for the appellant submits that the OA was filed by the bank
against the appellant which is still pending and further the appellant wanted
to resolve its liability. Admittedly notice invoking guarantee was issued on
18.07.2016 hence the three year period of limitation expired on 17.07.2019.
The Adjudicating Authority has rightly held the application barred by time. In
so far as application under Section 94 is dismissed as barred by time, the
said dismissal in no manner preclude the appellant to take such defences as
available in the pending matter before the DRT or any other proceedings in
accordance with law.
With these observations, we dismiss the appeal.
[Justice Ashok Bhushan] Chairperson
[Barun Mitra] Member (Technical) harleen/NN
2 of 2 Company Appeal (AT) (Ins) No. 675 of 2025
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