Vipin Shersingh Agarwal vs State Bank Of India And Anr

Vipin Shersingh Agarwal ...Appellant

Vs.

State Bank of India & Anr. ...Respondents

Present: Appellant: Mr. Abhishek Anand, Mr. Karan Kohli and Ms. Vanshika Dhoot, Advocates Respondent: Mr. Kunal Kanungo, Ms. Tanushree Sogani and Mr. Atishay Jain, Advocates for R-1 Mr. Suraj Chaudhary and Mr. Aakash Shah, Advocates for R-2

ORDER

(Hybrid Mode)

Per: Justice Rakesh Kumar Jain (ORAL)

22.4.2025 - This Appeal is directed against the Order dated 17th

April, 2024 passed by the National Company Law Tribunal (for

short, NCLT), Mumbai Bench by which the application filed under

Section 95 of the Insolvency and Bankruptcy Code, 2016 (the Code)

read with Rule 7(2) of the Insolvency and Bankruptcy (Application

to Adjudicating Authority for Insolvency Resolution Process for 2

Personal Guarantors to Corporate Debtor) Rules, 2019 (for short,

the Rules) for initiating insolvency resolution process against the

present Appellant for the recovery of sum of Rs.179,06,57,146/- as

on 30th November, 2021 has been allowed and Mr. Birendra Kumar

Agrawal has been appointed as the Insolvency Resolution

Professional (for short, IRP). Brief facts of the case are that Vistar

Metal Industries Pvt. Ltd. (Corporate Debtor) had entered into

Working Capital Consortium Agreements on 19.01.2013 and

17.12.2014 with consortium of banks being the SBI and Bank of

Baroda. The Appellant furnished the guarantee by executing the

deed of guarantee dated 17th December, 2014. The three Financial

Creditors - Mr. S.P Agarwal, Mr. Rishi Aggarwal and Ms. Kamlesh

filed an application under Section 7 of the Code bearing

CP(IB)1331/MB/2017 before the NCLT, Mumbai Bench against the

Corporate Debtor for the resolution of an amount of

Rs.2,01,00,000/- which was admitted on 14th October, 2019,

moratorium was imposed and Mr. Atul Jain was appointed as the

IRP. After this, the application under Section 95 was filed. The SBI

invoked the guarantee vide its Notice dated 16th January, 2017 in

respect of Rs.86,20,51,774.59/- together with interest thereon

Company Appeal (AT) (Ins) No.1790 of 2024 3

compounding with monthly rests and qua the amount of Bank of

Baroda of a sum of Rs.56,61,30,446.94. As per this Notice, the

present Appellant was asked to pay the aforesaid amount within a

period of 15 days by 31st January, 2017. Thereafter, the State Bank

of India also issued Notice under Rule 7 of the Rules on 9th

September, 2021 which was also replied by the Appellant on 25 th

February, 2022. Pursuant thereto, the SBI filed an application

under Section 95 on Form 'C' in terms of Rule 7 of the Rules in

which the date of default is mentioned as 31st January, 2017 (after

expiry of 15 days of legal Notice dated 16th January, 2017). The

application filed under Section 95 was ultimately allowed by the

Tribunal holding that the limitation is to be counted from the

demand Notice dated 9.9.2021 and that Respondent No.1 Bank had

duly invoked the guarantee vide Notice dated 16th January, 2017.

2. Aggrieved by the aforesaid two findings of the impugned Order,

the present Appeal has been preferred by the guarantor. Counsel

for the Appellant has argued that the Notice dated 16th January,

2017 does not carry the address which is provided in the deed of

guarantee i.e. Shri Vipin Agarwal, son of Shersingh Agarwal, Indian

Company Appeal (AT) (Ins) No.1790 of 2024 4

inhabitant residing at 201, Arya Aanchal, Near Ahobila Math, Road

No.8, Chembur (E), Mumbai - 400071 which is also the address

mentioned in the acknowledgement due issued by the Department

of Posts. It is, therefore, contended that until and unless the

guarantee is invoked which was on demand, the Petition filed under

Section 95 was not maintainable. In this regard, he has relied on a

decision of this Court in the case of "Pooja Ramesh Singh vs.

State Bank of India & Anr." In Company Appeal (AT) (Ins)

No.329 of 2023 decided on 28th April, 2023. On the issue of

limitation, it is contended that the limitation could not have been

counted from the Notice issued under Rule 7 dated 9.9.2021 as the

same has to be counted from the date of default which has been

mentioned by the Applicant/SBI as 31st January, 2017. It is further

submitted since the Application was filed on 2nd March, 2022

therefore, it was clearly barred by time. In this regard he has relied

upon a decision of this Court in "State Bank of India vs. Mr.

Deepak Kumar Singhania" in Company Appeal (AT) (Ins)

No.191 of 2025. In Reply, Counsel for Respondent No.1 has

submitted that the Notice dated 16th January, 2017 has been sent

on the address of the Appellant at Shri Vipin Shersingh Agarwal,

Company Appeal (AT) (Ins) No.1790 of 2024 5

Vaishnav Sadan, Bungalow No.2, Vikas Classique CHS, Behind

Bansant Cinema, Chembur, Mumbai - 400074 and the same was

received by the Appellant as there is no averment either in the

pleadings set up before the Tribunal nor before this Tribunal that

the said Notice was never received by the Appellant. In this regard,

Counsel for the Bank has also referred to para - 9 of Form 'C' in

which there is a reference about the Notice dated 16 th January,

2017. The precise language used in this para is as under:-

"....through advocate issued notice dated 16.oi.2017 to the Corporate Debtor and its guarantors demanding payment of the dues. However, the Corporate Debtor as well as the guarantors miserably failed and neglected to repay the outstanding dues and did not even respond to the said notice. A copy of the legal notice dated

16.oi.2017 is attached herewith and marked as Exhibit E."

3. In this regard, Counsel for Respondent No.1 has referred to

Reply to Form 'C' in which it is submitted by the Appellant as

under:-

"It is submitted that the Advocates for the Petitioner, who addressed the Legal Notice dated 16.01.2017 Company Appeal (AT) (Ins) No.1790 of 2024 6

(Exhibit E to the Petition), have mentioned the Term Loan Facility at Sr.No.1 in the notice (on page no.58 of the Petition)."

4. It is submitted by Respondent No.1 that had this Notice not

been received by the Appellant, he should have averred about the

non-receipt of the Notice in clear terms whereas there is no such

averment made in the Reply to the Application filed under Section

95 that no such Notice was ever received by the Appellant. He has

further submitted that on the same address i.e. Shri Vipin

Shersingh Agarwal, Vaishnav Sadan, Bungalow No.2, Vikas

Classique CHS, Behind Bansant Cinema, Chembur, Mumbai -

400074 on which the Notice dated 16th January, 2017 was sent, the

Notice under Rule 7 dated 9.9.2021 was also sent which was

received by the Appellant by hand. It is, therefore, submitted that it

is a lame excuse raised by the Appellant that Notice dated 16th

January, 2017, having been sent on an address which is different

from the address provided in the deed of guarantee, was not

received by the Appellant.

Company Appeal (AT) (Ins) No.1790 of 2024 7

5. In so far as the issue of limitation is concerned, it is submitted

that though the Tribunal has held that limitation has to be counted

from Notice dated 9.9.2021 but even if for the sake of arguments, it

is not accepted as correct, the application filed under Section 95 is

still well within the period of limitation because of Section 18 of

Limitation Act, 1963 (for short, the Act). It is submitted that even if

the limitation is to be counted from date of default i.e. 31 st January,

2017, the period of 3 years has to be counted in terms of Article

137 of the Act as per which the application under Section 95 could

have been filed up to 16th January, 2020. However, it is submitted

that during this interregnum, the Appellant was pushed into CIRP

by Order dated 14th October, 2019, but the balance sheet, in which

the long term borrowings and short term borrowings have been

shown pertaining to Respondent No.1 were signed before admission

under Section 7 by the Corporate Debtor and after the Order of

admission dated 14th October, 2019 by the RP who has stepped into

the shoes of the Corporate Debtor. Counsel for Respondent No.1

has also submitted that even the balance sheet of the year 2019-

2020 has been signed by the Appellant. It is submitted that it has

now been well settled by the Hon'ble Supreme Court that the period

Company Appeal (AT) (Ins) No.1790 of 2024 8

of limitation would restart from the date of acknowledgement for a

period of three years if the acknowledgement is made during the

subsistence of the period of limitation as provided by Section 18 of

the Act and a period of three years again becomes available from

the date of acknowledgement. Therefore, the application filed under

Section 95 is within the limitation period. In rebuttal, Counsel for

the Appellant has argued that the Tribunal has not taken into

consideration the balance sheets set up by Respondent No.1 and

recorded a finding that the limitation would start from 9.9.2021

therefore, impugned Order deserves to be set aside on this ground.

In this regard, Counsel for Respondent No.1 has submitted that the

Tribunal has taken into consideration the Reply and the Rejoinder

as has been mentioned in para - 5 of the impugned Order and the

balance sheets are part of the Rejoinder. Therefore, these are on the

record of the Tribunal and can be looked into by this Court for the

purpose of deciding the issue of limitation.

6. We have heard Counsel for the parties and perused the

records. The first issue raised in this case is about the Notice of

invoking guarantee deed dated 16th January, 2017 which was

Company Appeal (AT) (Ins) No.1790 of 2024 9

sent on the address - "Shri Vipin Shersingh Agarwal, Vaishnav

Sadan, Bungalow No.2, Vikas Classique CHS, Behind Bansant

Cinema, Chembur, Mumbai - 400074" which is different from the

address provided in the guarantee deed. The argument of the

Appellant that it has been clearly provided in the guarantee deed

that it has to be sent on the address provided in the guarantee deed

and can also be sent to a different address with prior intimation of

the Appellant is of no consequence because in the entire pleadings,

both before the Tribunal and before this Court, the Appellant has

not said a word that the said Notice was never received. Rather the

Appellant has taken a technical plea that Notice should have been

sent on the address provided in the guarantee deed. In the absence

of denial on the part of the Appellant that he did not receive the

Notice dated 16th January 2017, having been sent on an address

different from the one provided in the deed of guarantee, it has to be

presumed that the notice was duly received by the Appellant.

7. Moreover, Respondent No.1 sent the Notice dated 9.9.2021,

under Rule 7 of the Rules, addressed to Shri Vipin Shersingh

Agarwal, Vaishnav Sadan, Bungalow No.2, Vikas Classique CHS,

Company Appeal (AT) (Ins) No.1790 of 2024 10

Behind Bansant Cinema, Chembur, Mumbai - 400074 which was

delivered to the Appellant on the same address by hand. In these

circumstances, we are of the view that the Appellant had duly

received the Notice of invoking of guarantee deed dated 16 th

January, 2017 in relation to guarantee deed dated 17th December,

2014.

8. On the second issue of limitation, the default occurred on 31st

January, 2017 for which the application under Section 95 could

have been filed up to 31st January, 2020. However, in between while

the period of limitation was continuing the Corporate Debtor

acknowledged the debt in the balance sheets which further enlarged

to period of limitation from every date of acknowledgement. In this

regard, reference may be had to Clause 12 of the Guarantee Deed

which is as under:-

"The Guarantors affirm, confirm and declare that any balance confirmation and / or acknowledgement of debt and / or admission of liability given or promise or part payment made by the Borrower or the authorised agent of the Borrower to the said Banks shall be deemed to have been made and / or given

Company Appeal (AT) (Ins) No.1790 of 2024 11

by or on behalf of the Guarantors themselves and shall be binding upon each of them."

9. In view of the aforesaid Clause in the guarantee deed, that any

admission of liability by the borrower shall be deemed to be

admission of debt by the guarantor as well, the balance sheets,

being part of the record of the Tribunal has to be looked into for the

purpose of extension of limitation from the date of

acknowledgement. It is needless to mention that as per Section 18,

the acknowledgement has to be in writing which of course in this

case has been signed by the RP on behalf of the Corporate Debtor

as well as the guarantor. No other issue has been raised.

10. In view of the aforesaid circumstances, we do not find any

merit in the Appeal. Therefore, the same is dismissed. No cost. All

pending I.A.s are hereby closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Naresh Salecha] Member (Technical) rs/ravi

Company Appeal (AT) (Ins) No.1790 of 2024