In the matter of UCO Bank vs. Souvanik Mal,
- CitationI.A. (I.B.C.)/1077/ KB/2025 in C.P. (IB)/117/KB/2025
Ratio decidendi
The rule this decision rests on
The application under Section 99 of the Insolvency and Bankruptcy Code, 2016 against a personal guarantor is not maintainable where it is filed beyond the three-year limitation period; the limitation period runs from the date of default of the guarantor as established by the demand notice to the guarantor, and not from the date of default of the corporate debtor or the date of declaration of NPA. The Resolution Professional's report under Section 99 is recommendatory only and does not bind the Adjudicating Authority, which must independently determine whether to admit or reject the application under Section 100.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
KOLKATA BENCH SPECIAL BENCH, COURT – I I.A.(I.B.)/1077/KB/2025 IN C.P.(IB)/117/KB/2025 ORDER PER: BIDISHA BANERJEE, HON’BLE MEMBER (JUDICIAL) 1. The Court convened in a hybrid mode. 2. This I.A.(IB)No. 1077/KB/2025 in C.P.(IB)/117(KB)2025 has been preferred by the Financial Creditor to seek initiation of Insolvency Regulation Process against the Respondent Personal Guarantor to Corporate Debtor Rule, 2019 (“Personal Guarantors Rules”) and Regulation 4(2) of IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 (‘Personal Guarantors Regulations’) in terms of Section 99 (1) of the Insolvency and Bankruptcy Code, 2016 read with applicable Regulation of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2016 and in terms of Section 60(5) of the Insolvency and Bankruptcy Code, 2016 to condone the delay in filing the instant Application. 3. The amount in debt and default is Rs. 10,27,15,000/- (Rupees Ten Crores Twenty-Seven Lakhs Fifteen Thousand Only) with further interest and incidental expenses, costs in the accounts as on 31.12.2024. 4. On 22.11.2021, the Financial creditor has issued a demand notice to the Corporate Debtor as well as the personal guarantors demanding Rs. 7,58,81,655.06/- (Rupees Seven Crores Fifty-Eight Lacs Eighty-one Thousand Six Hundred Fifty-Five and Six Paise Only), asking them to clear the outstanding balance within 30.11.2021. 5. On 06.12.2021, the Financial Creditor has sent another notices under Section 13(2) of the SARFAESI Act, 2002 to the Corporate Debtor along with the Personal Guarantor of Corporate Debtor demanding an amount of Rs. 7,60,89,574.06/-(Rupees Seven Crores Sixty Lacs Eighty-Nine Thousand Five Hundred Seventy-Four and Six Paise only)
KOLKATA BENCH SPECIAL BENCH, COURT – I I.A.(I.B.)/1077/KB/2025 IN C.P.(IB)/117/KB/2025 inclusive of Interest till 10.11.2021, within 60 days from the date of the notice. 6. On 06.09.2024, the Financial Creditor has issued a Preliminary Notice to the CD and Guarantors asking them to regularize the loan amount, within 15 days from the receipt of notice. 7. The personal guarantee was invoked on by Financial Creditor on 22.11.2021, and Personal Guarantor was asked to clear the outstanding amount within 30.11.2021. Thus, the date of default is 30.11.2021 and the application was filed on 04.04.2025. Hence, this application is filed beyond the period of limitation of 3 years. 8. The Financial Creditor had proposed the name of the Insolvency Professional for appointment as Resolution Professional. In view of the above, Mr. Debdas Chakraborty, IBBI Registration No. IBBI/IPA- 001/IP- P-01794/2019-2020/12758, email ID: ipddc2019@rediffmail.com; was appointed as Resolution Professional, subject to his possessing a valid AFA, in exercise of the power conferred under Section 97 of the IBC, 2016 on this Authority. 9. The Resolution Professional was directed to file declaration within seven days to the effect that he fulfils all the requirements for being appointed as Resolution Professional in the matter which he has given, and to file his report in terms of Section 99 within 10 days. 10. The Resolution Professional Mr. Debdas Chakraborty, in I.A. (IB) 1077/KB/2025 has vide his report dated 1st July, 2025 suggested/stated as extracted as hereunder:
KOLKATA BENCH SPECIAL BENCH, COURT – I I.A.(I.B.)/1077/KB/2025 IN C.P.(IB)/117/KB/2025
KOLKATA BENCH SPECIAL BENCH, COURT – I I.A.(I.B.)/1077/KB/2025 IN C.P.(IB)/117/KB/2025
KOLKATA BENCH SPECIAL BENCH, COURT – I I.A.(I.B.)/1077/KB/2025 IN C.P.(IB)/117/KB/2025
KOLKATA BENCH SPECIAL BENCH, COURT – I I.A.(I.B.)/1077/KB/2025 IN C.P.(IB)/117/KB/2025
11. However, the RP has not written the date of invocation of personal guarantee by Financial Creditor and kept it blank. 12. The Resolution Professional Mr. Debdas Chakraborty, in I.A. (IB) 1077/KB/2025 has vide his report dated 1st July, 2025 recommended admission of the personal guarantor into Insolvency resolution process. The relevant portion of his report has been extracted and appended below for the sake of convenience.
KOLKATA BENCH SPECIAL BENCH, COURT – I I.A.(I.B.)/1077/KB/2025 IN C.P.(IB)/117/KB/2025
13. We rely on the judgment of the Hon’ble Supreme Court, in Civil Appeal No. 6894 of 1997 (Syndicate Bank vs. Channaverappa Beleri & Ors.), by an order dated 10.04.2006, held that the limitation period of three years for proceedings against a guarantor begins from the date of invocation of the bank guarantee and not from the date of default of the corporate debtor. It provides that the limitation starts on expiry of 15 days from the date the demand is made by the bank, and a suit filed within three years from such demand is timely. This principle has been consistently followed by several NCLTs and NCLATs.
KOLKATA BENCH SPECIAL BENCH, COURT – I I.A.(I.B.)/1077/KB/2025 IN C.P.(IB)/117/KB/2025 14. The Hon’ble NCLAT in Pooja Ramesh Singh vs. SBI Company Appeal (AT)(insolvency)No. 329 of 2023, wherein Appellate Tribunal has held that the date of Notice to guarantor for repayment has to be treated as notice of default on receipt of such notice the date of default is established. In this case, considering the above judgement of Hon’ble NCLAT this application has been filed beyond the 3 years from date of the notice and hence is barred by limitation. (Emphasis added) 15. It has also been held in the case of Laxmi Pat Surana, Babulal Vardharji Gurjar, B.K Educational Services Pvt. Ltd. and Jignesh Shah that the period of limitation would be attracted from the date when the default occurs and not from the date of declaration of NPA. 16. The RP Report did not consider the date of invocation of guarantee and limitation period required for the admission of the Application. 17. It is to be noted that Hon’ble Supreme Court in the judgment of Dilip B. Jiwrajka vs. Union of India & Ors. In W.P. (Civil) No. 1281 of 2021 dated 09.11.2023 has upheld the Constitutional Validity of the Sections 94 to 100 and inter alia held :
“vi. No judicial determination takes place until the adjudicating authority decides under Section 100 whether to accept or reject the application. The report of the resolution professional is only recommendatory in KOLKATA BENCH SPECIAL BENCH, COURT – I I.A.(I.B.)/1077/KB/2025 IN C.P.(IB)/117/KB/2025 nature and hence does not bind the adjudicatory authority when it exercises its jurisdiction under Section 100” 18. As the nature of the RP Report is only recommendatory, we fail to concur with the RP’s recommendation. 19. Thus, we hold that the petition is not maintainable as the same is filed beyond the period of limitation. 20. In terms of the above, C.P (IB) 117/KB/2025 is thus dismissed, I.A. (IBC) 1077/KB/2025 shall stand disposed of.
REKHA KANTILAL SHAH BIDISHA BANERJEE MEMBER (TECHNICAL) MEMBER (JUDICIAL)
This Order is signed on this, the 16th Day of April, 2026. Sagar M. (LRA)
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