Lokesh Kumar Sharma vs State Bank Of India

IN THE MATTER OF: Brij Kishore Gupta ...Appellant

Versus

State Bank of India & Anr. ...Respondent

Present: For Appellant : Mr. Manish Paliwal, Megha Yadav, Adv. For Respondent : Mr. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Adv. for R1 Mr. J. P. Rawat, RP

With Comp. App. (AT) (Ins) No. 754 of 2025

IN THE MATTER OF: Chandra Mohan Singhal ...Appellant

Versus

State Bank of India & Anr. ...Respondent

Present: For Appellant : Mr. Manish Paliwal, Megha Yadav, Adv. For Respondent : Mr. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Adv. for R1 Mr. J. P. Rawat, RP With Comp. App. (AT) (Ins) No. 755 of 2025

IN THE MATTER OF: Bitthal Prasad Agarwal ...Appellant

Versus

State Bank of India & Anr. ...Respondent

Present: For Appellant : Mr. Manish Paliwal, Megha Yadav, Adv. For Respondent : Mr. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Adv. for R1 Mr. J. P. Rawat, RP With Comp. App. (AT) (Ins) No. 756 of 2025

IN THE MATTER OF: Giriraj Kumar Singhal ...Appellant

Versus

State Bank of India & Anr. ...Respondent

Present: For Appellant : Mr. Manish Paliwal, Megha Yadav, Adv. For Respondent : Mr. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Adv. for R1 Mr. J. P. Rawat, RP With Comp. App. (AT) (Ins) No. 757 of 2025

IN THE MATTER OF: Lokesh Kumar Sharma ...Appellant

Versus

State Bank of India & Anr. ...Respondent

Present: For Appellant : Mr. Manish Paliwal, Megha Yadav, Adv. For Respondent : Mr. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Adv. for R1 Mr. J. P. Rawat, RP With Comp. App. (AT) (Ins) No. 759 of 2025

IN THE MATTER OF: Radha Agarwal ...Appellant

Versus

State Bank of India & Anr. ...Respondent

Present: For Appellant : Mr. Manish Paliwal, Megha Yadav, Adv. For Respondent : Mr. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Adv. for R1 Mr. J. P. Rawat, RP With Comp. App. (AT) (Ins) No. 760 of 2025

IN THE MATTER OF: Shyam Sunder Sharma ...Appellant

Versus

State Bank of India & Anr. ...Respondent

Present: For Appellant : Mr. Manish Paliwal, Megha Yadav, Adv. For Respondent : Mr. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Adv. for R1 Mr. J. P. Rawat, RP With Comp. App. (AT) (Ins) No. 761 of 2025

IN THE MATTER OF: Gayatri Devi Singhal ...Appellant

Versus

State Bank of India & Anr. ...Respondent

Present: For Appellant : Mr. Manish Paliwal, Megha Yadav, Adv. For Respondent : Mr. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Adv. for R1 Mr. J. P. Rawat, RP With Comp. App. (AT) (Ins) No. 762 of 2025

IN THE MATTER OF: Ramavtar Sharma ...Appellant

Versus

State Bank of India & Anr. ...Respondent

Present: For Appellant : Mr. Manish Paliwal, Megha Yadav, Adv. For Respondent : Mr. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Adv. for R1 Mr. J. P. Rawat, RP With Comp. App. (AT) (Ins) No. 763 of 2025 IN THE MATTER OF: Varun Gupta ...Appellant

Versus

State Bank of India & Anr. ...Respondent

Present: For Appellant : Mr. Manish Paliwal, Megha Yadav, Adv. For Respondent : Mr. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Adv. for R1 Mr. J. P. Rawat, RP

Comp. App. (AT) (Ins) No. 758 of 2025

IN THE MATTER OF: Om Prakash Sharma ...Appellant

Versus

State Bank of India & Anr. ...Respondent

Present: For Appellant : Mr. Manish Paliwal, Megha Yadav, Adv. For Respondent : Mr. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Adv. for R1 Mr. J. P. Rawat, RP

ORDER

(Virtual Mode)

Per: Justice Rakesh Kumar Jain (Oral)

09.09.2025: This order shall dispose of a batch of 11 appeals bearing

Comp. App. (AT) (Ins) No. 692 of 2025, Comp. App. (AT) (Ins) No. 754 of 2025,

Comp. App. (AT) (Ins) No. 755 of 2025, Comp. App. (AT) (Ins) No. 756 of 2025,

Comp. App. (AT) (Ins) No. 757 of 2025, Comp. App. (AT) (Ins) No. 759 of 2025,

Comp. App. (AT) (Ins) No. 760 of 2025, Comp. App. (AT) (Ins) No. 761 of 2025,

Comp. App. (AT) (Ins) No. 762 of 2025, Comp. App. (AT) (Ins) No. 763 of 2025

& Comp. App. (AT) (Ins) No. 758 of 2025 as the issues involved in all these appeals are common. However, for the sake of convenience, the facts are being

extracted from CA (AT) (Ins) No. 692 of 2025.

2. The brief facts of this case are that M/s Vimladevi Agro Tech Ltd.

secured a loan from the State Bank of India of Rs. 5,30,00,000/- vide sanction

letter dated 21.08.2010. The loan agreement was executed between the

parties on 31.08.2010.

3. The loan advanced by the Bank was secured by the borrower by

furnishing personal guarantees of the Appellant in all the aforesaid appeals.

A common guarantee deed was executed on three occasions on 21.08.2010,

12.11.2019 and 03.12.2011.

4. The account of the borrower were declared as NPA on 25.11.2013 and

the Bank issued a recall notice dated 29.11.2013 to the borrower as well as

the guarantors demanding the outstanding of Rs. 4,51,97,587/-.

5. The Bank also served a demand notice on 02.12.2013 under Section

13(2) of the SARFAESI Act, 2002 (in short 'Act, 2002') to the borrower as well

as the guarantors and the Bank also issued possession notice under Section

13(4) of the Act, 2002 on 08.02.2014 both to the borrower and the guarantors

and taken symbolic possession of the mortgaged assets on 25.02.2014.

6. Pursuant to the aforesaid proceedings, O.A No. 283 of 2014 was filed

under Section 19(1) of the Recovery of Debts and Bankruptcy Act, 1993 before

the DRT, Jaipur (DRT) against the borrower and the guarantors for the

recovery of loan. The DRT vide its order dated 27.06.2019 issued the recovery

certificate bearing RC No. 524 of 2019 against the borrower and the

guarantors for sum of Rs. 5,24,43,204.86/-.

7. The Bank conveyed to the principal borrower about the OTS vide its

letter dated 27.08.2019 offering to settle the matter at a sum of Rs.

3,27,92,027/-.

8. According to the bank, the borrower gave his willingness to accept the

said OTS vide its letter dated 23.09.2019 and thereafter, the terms of the OTS

were conveyed to the borrower vide letter dated 30.09.2019 by the Bank which

was alleged to have been acknowledged and agreed to by the borrower.

9. It is the case of the Bank that since the borrower did not comply with

the OTS, therefore, it frustrated the OTS which is evident from the letter dated

01.11.2019 issued by the Bank and because of the default on the part of the

borrower and the guarantors, the Bank not only filed the application under

Section 7 of the Code against the principal borrower in which CIRP has

already been initiated but also filed separate application under Section 95 of

the Code against the guarantors.

10. However, before filing the application under Section 95, the Bank served

statutory notice as envisaged under Rule 7(1) of the Insolvency and

Bankruptcy (Application to AA for Insolvency Resolution Process for Personal

Guarantors to CD) Rules, 2019 on 07.06.2024.

11. The application was contested by the Appellants/Personal guarantors

before the Tribunal only on the issue of limitation which was decided against

the Appellants holding that the application filed under Section 95 was within

the period of limitation. In this regard, the observation made by the Tribunal

is recorded in para 17 which read as under:-

"17. At this juncture, it is pertinent to refer to the Hon'ble Supreme Court's decision in Suo Moto Writ Petition No. 03 of 2020 wherein it was directed that the period from 15.03.2020 to 28.02.2022 shall be excluded for the purposes of limitation. Taking into account the exclusion period provided by the Hon'ble Apex Court and the date of filing of the Petition i.e., 27.08.2024, we find that the present Petition has been filed within the prescribed limitation period"

12. The Tribunal after admitting the application filed under Section 95,

appointed RP who had filed the report under Section 99 by way of I.A No. 572

of 2024 which has been accepted by the Tribunal by the impugned order.

13. The Appellant thus, aggrieved against the order dated 25.02.2025, has

preferred these appeals under Section 61 of the Code.

14. Counsel for the Appellant, at the outset, has assailed the finding

recorded by the Tribunal on the issue of limitation. It is contended by him

that if the limitation is counted from the date of decree / recovery certificate

dated 27.06.2019, the application under Section 95 having been filed on

10.08.2024 is beyond the period of three years as provided under Article 137

of the Limitation Act, 1963 (in short 'Act'). He has further submitted that

limitation cannot be counted w.e.f 23.09.2019 because no acknowledgement

was made by the borrower. In this regard, he has referred to the letter dated

30.09.2019 to contend that in the said letter the Bank had pertinently asked

for the consent which had never been given, therefore, there is no question of

any acknowledgement to count the limitation from 30.09.2019. He further

submitted that even the application under Section 95 could not have been

filed without invoking the guarantee which was on demand. In this regard, he has submitted that the bank had only issued a statutory notice dated

07.06.2024 before filing the application under Section 95 and there is no other

letter/ notice invoking the guarantee. In this regard, he has relied upon a

decision of this Court in the case of State Bank of India Vs. Deepak Kumar

Singhania, CA (AT) (Ins) No. 191 of 2025.

15. In reply, Counsel for the Bank has submitted that there is no error in

the order passed by the Tribunal in so far as the issue of limitation is

concerned which was the sole issue raised earlier. It is submitted that if the

limitation is to be counted from the date of recovery certificate dated

27.06.2019 even then the application filed on 10.08.2024 is within the period

of limitation. He has further submitted that though admitted even the

limitation of three years would again start running from 23.09.2019 when the

debt was acknowledged by the borrower vide its letter dated 23.09.2019. The

Bank has further submitted that the contention of the Appellant is incorrect

that the Bank had not issued any notice of demand invoking the bank

guarantee prior to the statutory notice. He has referred to letter dated

29.11.2013. In this regard, he has relied upon a decision of this Court in the

case of State Bank of India Vs. Gourishankar Poddar, CA (AT) (Ins) No. 689 of

2024 to contend that the acknowledgement of debt by the borrower is the

acknowledgement by the guarantor. He has further submitted that in so far

as the statutory notice dated 07.06.2024 is concerned, the same was sent in

compliance of Rule 7 as the said notice is a sine qua non for the purpose of

invoking Section 95 of the Code.

16. In rebuttal, Counsel for the Appellant has reiterated its stand in respect

of both the contentions i.e limitation as well as non-availability of notice

invoking the guarantee.

17. We have heard Counsel for the parties and perused the record with their

able assistance.

18. In so far as the issue of limitation is concerned, there are two dates

given by the bank i.e. 27.06.2019, date on which the recovery certificate was

issued and 23.09.2019 when the OTS proposal made by the Bank was

accepted by the principal borrower.

19. If the limitation is to be counted from 27.06.2019 then the period of

three years would come to an end on 27.06.2022 whereas the application

under Section 95 was filed on 10.08.2024. During the currency of period of

limitation, because of the Covid-19 the Hon'ble Supreme Court passed the

order on 10.01.2022 in Re : cognizance for extension of limitation, as per

which the period from 15.03.2020 till 28.02.2022 was ordered to be excluded

for counting the limitation, as may be prescribed under any general or special

laws, in respect of all judicial or quasi judicial proceedings.

20. According to the Appellant, the limitation started running from

27.06.2019 and according to the Respondent its stopped running from

15.03.2020 onwards but the Bank had already consumed 262 days before the

exclusion period started from 15.03.2020 to 28.02.2022. Out of the total

period 1095 days i.e. 365x3 = 1095 days available to the Bank it had

consumed 262 days and was left only with 833 days which would expire on

28.05.2022 whereas the application was filed on 10.08.2024 which is clearly

barred by limitation.

21. On the other hand, as per counsel for the Bank besides the period of

833 days, another period of 90 days is also available it. In this regard, he has

referred to clause 5(iii) of the order dated 10.01.2022 passed by the Hon'ble

Supreme Court which is reproduced as under:-

"III. In cases where the limitation would have expired during the

period between 15.03.2020 till 28.02.2022, notwithstanding the

actual balance period of limitation remaining, all persons shall

have a limitation period of 90 days from 01.03.2022. In the event

the actual balance period of limitation remaining, with effect

from 01.03.2022 is greater than 90 days, that longer period shall

apply."

22. According to the bank with the addition of period of 90 days the

limitation would go up to September, 2024 and the application under Section

95 having been filed on 10.08.2024 was within the period of limitation.

23. Counsel for the Bank has also submitted that even if the contention

raised by the respondent is not accepted for the sake argument then the

limitation was further extended for another period of three years from the date

of acknowledgment i.e. 23.09.2019 which would culminate in month of

September, 2019 itself. In this regard, he has referred to Section 18 of the Act

as per which the period of three years would again start to run from every

acknowledgment of the debt.

24. The question would thus arise as to whether there was an

acknowledgement on the part of the borrower qua the payment of dues on account of the proposal of the OTS by the Bank. In this regard, it would be

relevant to refer to the letter dated 27.08.2019 by which the proposal was

given, which is reproduced as under:-

25. This letter was duly replied by the borrower on 23.09.2019. The said

letter is also reproduced as under:-

26. However, according to the Appellant, there is another letter dated

30.09.2019 which was written by the Bank to the Appellant in which the bank

had asked for the alleged consent. The said letter is also reproduced as

under:-

27. Counsel for the Bank has then referred to the letter dated 01.11.2019

by which the Bank has informed the Appellant that since they have not

deposited the amount in terms and conditions of sanction letter, therefore,

sanction of OTS is rendered infructuous and treated failed. The said letter is

also reproduced as under:-

28. From the reading of the aforesaid letter/communication between the

bank and borrower, it is apparent that the consent was given by the borrower

on 23.09.2019 on the basis of which it transpires that there was an

acknowledgment of debt on that date only, therefore, if the limitation of three

years is to be counted from 23.09.2019, the application having been filed on

10.08.2024, is within the period of limitation. Hence, the first contention

raised by the Appellant in regard to limitation is hereby repelled.

29. In so far as, the second contention of the Appellant is concerned, the

Appellant has only referred to notice dated 07.06.2024. This notice is a

statutory notice which is required to be served in terms of Rule 7 of the Rules

on form B. It is made clear that until and unless this notice is issued the said

application filed under Section 95 cannot be entertained but according to the

Bank, it had in fact issued notice of recall invoking the guarantee on

29.11.2013 not only to borrower but also to all the personal guarantors. The

said notice is also reproduced as under:-

30. From the perusal of the notice dated 29.11.2013, it is clear that the

guarantees given by the Appellants were already invoked and the notice under

Rule 7 was only a statutory notice.

31. In such circumstances, we do not find force in the second contention of

the Appellant as well that the notice was not given for invocation of the

guarantee.

32. No other point has been raised.

33. In view of the aforesaid discussion, all these appeals are found to be

devoid of merit and thus, the same is hereby dismissed. No costs.

Pending I.A.s, if any, are hereby closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Md. Faiz Alam Khan] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical) Sc/RR