Arvinder Kaur vs Santanu Kumar Samanta And Anr. & Ors

Mrs. Arvinder Kaur ...Appellant

Vs

1. Mr. Santanu Kumar Samanta ...Respondent No.1

2. M/s Bank of Maharashtra ...Respondent No.2

(Arising out of Order dated 19.11.2024 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench) in Interlocutory Application No. 1551 of 2024 in Company Petition (IB) No. 658/ND/2023)

For Appellant: Mr. Aman Raj Singh, Advocate For Respondent: Mr. Gautam Singhal, Mr. Rajat Chaudhary, Ms. Anjali Maurya, Ms. Suraksha Mandhyan, Advocates for R-1 Mr. Nishant Awana, Mr. Suraj Kundu, Advocates for R-2

JUDGEMENT

Per Justice N. Seshasayee, Member (Judicial)

Facts:

1. This appeal is directed by the personal guarantor challenging an order

admitting the petition filed by the respondent under section 95 IBC.

2. The scope of this appeal falls within a narrow campus. The respondent

bank had advanced a loan of Rs.1.0 Crore to the Corporate Debtor for

the purchase of plant and machinery, construction of factory building,

and also cash credit facility to the tune of Rs. 1.5 crore. Subsequently,

certain additional loan facilities were also extended to the Corporate

Debtor. Other relevant facts are:

a) Vide Deed of Guarantee dated 24.04.2010, the appellant herein gave

a personal guarantee for the aforesaid loan advanced to the

Corporate Debtor. Thereafter, some additional loan towards the

purchase of a vehicle was extended, for which a Deed of Guarantee

dated 10.09.2010 was obtained.

b) Be that as it may, the Corporate Debtor did not make any loan

repayment consequent to which the loan advanced to the Corporate

Debtor was classified as NPA on 24.04.2012. Following the same,

the respondent bank had issued notice dated 31.05.2012 to

Corporate Debtor and eventually sold the security properties in

auction.

c) Besides, the respondent had also instituted O.A. No. 226 of 2013

before DRT-III, New Delhi, for recovery of approximately ₹.5.52

Crores. On 28.01.2015 and 27.06.2015, the respondent had issued

notices recalling the loan facilities to the corporate debtor as well as

the appellant herein. However, neither made any payment.

d) While so, the corporate debtor, through the appellant, issued a letter

dated 05.01.2016 offering a One Time Settlement, but subsequently

withdrew the same. Again, on 28.04.2016, a proposal was made on

Comp. App. (AT) (Ins.) No. 264 of 2025

2 of 8 behalf of the corporate debtor to the respondent herein for settling

the outstanding dues. However, nothing came of it. A similar exercise

was undertaken once again when a fresh proposal was made on

28.08.2020; however, the said proposal also failed.

e) As these proceedings and events were pending, a payment was made

to the respondent-bank on 03.02.2021. The respondent-bank

thereafter issued a demand notice dated 26.11.2022, which was

subsequently withdrawn. Thereafter, on 01.09.2023, the bank

issued a notice to the Personal Guarantor under Rule 7 of the

Insolvency and Bankruptcy (Application to Adjudicating Authority

for Insolvency Resolution Process for Personal Guarantors to

Corporate Debtors) Rules, 2019. The said statutory notice did not

evoke any response from the appellant. In these circumstances, the

respondent-bank instituted a petition under Section 95 of the IBC,

2016 against the appellant seeking initiation of the Personal

Insolvency Resolution Process (PIRP).

f) The appellant entered appearance before the Adjudicating Authority.

On 17.01.2024, the Adjudicating Authority appointed the Resolution

Professional as contemplated under section 99 of IBC. The RP filed

his report dated 21.03.2024 vide IA 1551 of 2024. In his report, the

RP has recommended commencement of personal Insolvency

proceedings against the appellant. It may be noted that the

resolution professional has recorded in his report that despite

issuing notice to the appellant herein she had not chosen to respond.

Comp. App. (AT) (Ins.) No. 264 of 2025 3 of 8

g) On 02.04.2024, the RP's report was taken on record by the

Adjudicating Authority, and it issued notice to the Appellant.

Initially, the Tribunal had some difficulty in serving the notice and,

therefore, caused publication of notice by way of substituted service.

Eventually, the appellant entered appearance through counsel on

14.08.2024 and sought time for filing objections. Time was further

extended to 18.09.2024, but no reply was filed, as a result of which

the Adjudicating Authority closed the Appellant's right to file a reply.

h) On 25.10.2024, another counsel entered appearance for the

appellant and again sought time to file the reply, perhaps without

realizing the facts that the opportunity to file the reply had already

been closed. The Tribunal eventually heard the respondent's

counsel. This order is now under challenge.

i) When the matter was taken up for final hearing on 15.09.2025, we

heard the learned counsel for the appellant briefly and on that day,

and we passed the following Order:

"...2. On fact, the appellant has been served with a notice through speed post that she has first appeared on 14.08.2024, from which date the matter stood over to 04.09.2024 and eventually to 18.09.2024. And between these days, the appellant was granted time to file her reply and since the reply was not so filed, the Adjudicating Authority closed the opportunity to defend the petition or the Financial Creditor under Sec. 95 of the IBC. 3. The learned counsel for the appellant initially harped much on wrong email ID and mobile number of the appellant

Comp. App. (AT) (Ins.) No. 264 of 2025 4 of 8 but inasmuch a notice had been served on her through speed post and that she indeed had appeared through her counsel those issues have zero consequence now. So far as not filing of the reply, the learned counsel tries to make out the case that it was owing to certain some special reasons, which reasons he has not made clear..."

j) On 22.09.2025, the appellant was required to file an affidavit, and

on 30.09.2025, the appellant filed its affidavit. The relevant

paragraphs are para 3 & 4, and they read:

"3. It is the case of the Appellant that the reply could not be preferred before the Hon'ble Adjudicating Authority due to the issue of security code which could not be generated by the Appellant as the phone number and email Id attached to the Appellant in the Section 95 petition was wrong and the Appellant could not generate security code on time.

4. That the Appellant approached the Registry of the Hon'ble Adjudicating Authority for changing the number and the email id to receive the security code but before the same could be done, the order against the Appellant was passed by the Hon'ble Authority and hence the present appeal was preferred."

Plainly we were not satisfied with the quality of the reasons stated

in that affidavit (extracted above). In this backdrop, the learned

counsel for the appellant made a statement that he would confine

his argument only to the point of limitation, and this we recorded.

Comp. App. (AT) (Ins.) No. 264 of 2025 5 of 8

3. The principal question, which falls for consideration is whether the

application filed under Section 95 of the IBC was within limitation. The

contention of the appellant is that the application under Sec. 95 of the

Code was instituted on 28.09.2023, is barred by limitation, since the

account of the corporate debtor was classified as NPA as early as on

24.04.2012 and the credit facilities were recalled in the year 2015.

According to the appellant, even if the settlement proposals dated

05.01.2016 and 28.04.2016 are treated as acknowledgements of

liability, limitation stood extended only by three years and up to

28.04.2019, and hence the institution of the petition under Sec.95 in

2023 are therefore beyond time. And, the alleged proposal for settlement

in 2020 and the alleged part payment of the debt made on 03.02.2021

do not constitute valid acknowledgements and is not capable of

extending limitation. This apart, even O.A. No. 226 of 2013 which the

respondent has instituted was dismissed on 31.05.2018.

4. Per contra, the learned counsel for the respondent-bank refuted the

appellant's contentions and pitched its argument on the settlement

proposals made on behalf of the corporate debtor and emphasised more

on the part-payment of debt made by it on 03.02.2021 towards the

outstanding dues. It is further submitted that under the terms of the

deed of guarantee, any acknowledgement in writing or part-payment

made by the borrower is binding on the guarantor as well. Accordingly

the application filed on 28.09.2023 is within limitation. Turning to the

Comp. App. (AT) (Ins.) No. 264 of 2025 6 of 8 dismissal of O.A. No. 226 of 2013, it was dismissed only for default, and

not on merit of the claim.

Discussion & Decision

5. We have considered the rival submissions. The appellant's challenge

rests entirely on limitation. According to her, the account having been

classified as NPA on 24.04.2012 and the facilities having been recalled

in the year 2015, the application instituted under Section 95 on

28.09.2023 is barred by limitation. The submission proceeds on the

basis that even if the settlement proposals of the year 2016 are treated

as acknowledgements, limitation could survive only till the year 2019.

6. We are unable to agree with the contention of the appellant, and our

reasons are:

The respondent does not rest its case merely on the NPA classification

or the settlement proposals of 2016. It specifically relies on the part

payment of debt made on 03.02.2021 by the corporate debtor. Here, the

appellant disputes only its effect, but not its existence. The deed of

guarantee which the appellant has executed inter alia provides that any

part-payment made by the borrower will bind the guarantor. Therefore,

the payment relied upon by the respondent cannot be ignored while

examining limitation against the appellant. And given the fact that the

liability of the guarantor is co-extensive with the principal borrower, the

appellant cannot escape liability, and the plea of the appellant appears

to be a desperate effort in defending the action.

Comp. App. (AT) (Ins.) No. 264 of 2025

7 of 8

7. The appellant's reliance on the dismissal of O.A. No. 226 of 2013 before

the Debt Recovery Tribunal is equally misplaced. Dismissal of a

recovery proceeding for default does not extinguish the debt, nor does

it render a proceeding under Section 95 of the Code non-maintainable.

8. We therefore find no reason to interfere with the impugned order. The

appeal is dismissed. All pending IAs, if any, stand disposed of. No order

as to costs.

[Justice N. Seshasayee] Member (Judicial)

[Indevar Pandey] Member (Technical) rs/beena

Comp. App. (AT) (Ins.) No. 264 of 2025 8 of 8