The Property Company (P) Ltd Vs Rohinten Daddy Mazda - The provisions of the Act, 1963 (provisions that lay down a prescribed period of limitation as well as Sections 4 to 24 of the Act, 1963 respectively) would only apply to suits, applications or appeals, as the case may be, which are made under any law to ‘courts’ and not to those made before quasi-judicial bodies or tribunals, unless such quasi-judicial bodies or tribunals are specifically empowered in that regard.

  SCI (2026.01.07) in The Property Company (P) Ltd Vs Rohinten Daddy Mazda  [2026 INSC 33, CIVIL APPEAL NO. 92 OF 2026, (Arising out of S.L.P (Civil) No. 3906 of 2017)] held that; 

• The provisions of the Act, 1963 (provisions that lay down a prescribed period of limitation as well as Sections 4 to 24 of the Act, 1963 respectively) would only apply to suits, applications or appeals, as the case may be, which are made under any law to ‘courts’ and not to those made before quasi-judicial bodies or tribunals, unless such quasi-judicial bodies or tribunals are specifically empowered in that regard.

• It has been clarified that when such authorities or bodies are deemed to be a court for certain limited or specified purposes, such a legal fiction must not be extended beyond the purpose for which the fiction was created so as to confer powers under Section 5 of the Act, 1963 as well.

Excerpts of the Order;

G. CONCLUSION

# 160. A conspectus of the legal and factual discussion on the power of the CLB to extend time or condone delay under Section 58(3) of the Act, 2013 is as follows:

i. The appeal under Section 58(3) of the Act, 2013 preferred by the respondent herein was filed during the period between 12.09.2013 and 01.06.2016. Therefore, although the appeal was made under the new provision of the Act, 2013, yet the body/forum before which it was made i.e., the CLB, was one constituted under the provisions of the Erstwhile Act. According to Section 10E(4C) of the Erstwhile Act, the CLB was a court only in the restricted sense. There existed no express provision which empowered the CLB to apply the provisions of the Act, 1963 to the proceedings and appeals before itself.

ii. In multiple decisions of this Court, notable and significant emphasis has been placed on which institution/body is seeking  to employ the provisions of the Act, 1963 or exercise the powers conferred under the Act, 1963.

iii. The provisions of the Act, 1963 (provisions that lay down a prescribed period of limitation as well as Sections 4 to 24 of the Act, 1963 respectively) would only apply to suits, applications or appeals, as the case may be, which are made under any law to ‘courts’ and not to those made before quasi-judicial bodies or tribunals, unless such quasi-judicial bodies or tribunals are specifically empowered in that regard.

iv. In Officer on Special Duty (supra), Prakash H. Jain (supra) and Om Prakash (supra) respectively, this Court has unequivocally held that the power to extend time under Section 5 of the Act, 1963 cannot be resorted to by statutory authorities, quasi-judicial bodies or tribunals, unless expressly indicated. It has been clarified that when such authorities or bodies are deemed to be a court for certain limited or specified purposes, such a legal fiction must not be extended beyond the purpose for which the fiction was created so as to confer powers under Section 5 of the Act, 1963 as well.

v. In Parson Tools (supra) and M.P. Steel (supra) respectively, this Court has developed a body of jurisprudence indicating that the principles underlying Section 14 of the Act, 1963 could be applied to the provisions relating to quasi-judicial bodies, unless  there is any express indication to the contrary in the wording and scheme of the said provision. However, there exists a vital distinction between the principles underlying Sections 5 and 14 respectively.

vi. The differences between the principles underlying Sections 5 and 14 of the Act, 1963 respectively are as follows - First, one pertains to the exercise of a discretionary power vested in the courts and the other is a mandatory provision independent of any exercise of discretion; Secondly, one refers to “sufficient cause” which term by itself is subject to a good amount of elasticity and the other has delineated well-defined conditions which must be met; and Lastly, one deals with the extension of time while the other is concerned with the exclusion of time.

vii. The principles underlying Sections 5 and 14 of the Act, 1963 respectively, cannot be analogously applied to proceedings before quasi-judicial bodies because in the former, the courts exercise their discretion in extending and more specifically, adjusting the prescribed period of limitation itself to create a fresh period of limitation. No entitlement as a matter of right arises vis-à-vis extension of time. Whereas, in the latter, the prescribed period of limitation remains intact, no delay is attributed to the litigant and the time during which the abortive proceeding was being prosecuted is expunged in the eyes of the law to place the litigant back or restore his position within the  prescribed period of limitation wherein he is entitled to file the appeal or application, as the case may be, as a matter of right.

viii. The mechanism envisaged under Section 5 is proximally bound and tethered to the discretion with which a civil court is empowered and that under Section 14 is anchored on restoring the right of a litigant to institute an appeal or application, as the case may be, within the prescribed period of limitation. Both provisions work in the interest of the litigant and seek to further the cause of substantive justice, however, the kind and nature of the power exercised under the two provisions, as well as the mechanism envisaged therein, are quite distinct.

ix. Moreover, the principles underlying Sections 5 and 14 of the Act, 1963 respectively also stand on a different footing for the reason that when the legislature has intended to grant powers of extension of time, the same has been expressly indicated either through the manner in which the concerned provision is phrased (more often than not through a proviso) or by the adoption of the Act, 1963 through a separate provision to the special law as a whole (akin to Section 433 of the 2013, Act).

x. Therefore, the decision of this Court in M.P. Steel (supra) would not apply analogously to a situation when the principles underlying Section 5 of the Act, 1963 are sought to be applied by quasi-judicial bodies which aren’t empowered in that regard.

xi. Regulation 44 of the CLB Regulations which saves the inherent power of the CLB would not enable the CLB to extend time for the filing of the appeal or the application itself, as the case may be.

xii. In Ganesan (supra), it has been settled that the savings provision in the Act, 1963 i.e., Section 29(2), is of no relevance when the special or local law deals with a suit, appeal or application, as the case may be, which is to be filed before a quasi-judicial body. The question whether a certain provision in a special or a local law expressly excludes the provisions of Sections 4 to 24 of the Act, 1963 respectively arises only in pursuance of the savings provision under Section 29(2) of the Act, 1963. As a natural corollary, if Section 29(2) is, by itself, inapplicable to a particular case then there would be no need to look into or analyse whether there is any express exclusion.

xiii. An exception to the aforesaid, i.e., a reason why one would still look at whether Sections 4 to 24 of the Act, 1963 respectively are “expressly excluded” irrespective of the application of Section 29(2) of the Act, 1963, is when the argument that the principles underlying those provisions of the Act, 1963, must be applied, is being explored.

xiv. Presently, we are dealing with an appeal under Section 58(3) of the Act, 2013 preferred before the CLB – a quasi-judicial body.

We have also answered in the negative on the submission that the principles underlying Section 5 of the Act, 1963 must be applied. Section 29(2) of the Act, 1963 is, therefore, of no relevance and there arises no occasion to examine whether Section 58(3) of the Act, 2013 “expressly excludes” the application of Section 5 of the Act, 1963.

xv. The simpliciter limitation period prescribed under Section 58(3) of the Act, 2013 must not be read to be merely directory. The presence of any additional pre-emptory language in the form of “but not thereafter” or “shall” would not always be necessary to convey that the prescribed period is mandatory.

xvi. Section 433 of the Act, 2013 which empowers the NCLT and the NCLAT respectively to apply the provisions of the Act, 1963, as far as may be, to the proceedings and appeals before itself, cannot be borrowed to signify the existence of a similar power with respect to the CLB. Moreover, the remedy of the respondent was already time-barred before the coming into force of Section 58(3) of the Act, 2013, let alone the coming into force of Section 433 of the Act, 2013. Hence, the change in law cannot enure to the benefit of the present respondent.

# 161. In the overall view of the matter, we have reached the conclusion that the High Court could be said to have committed an error in dismissing the statutory appeal filed under Section 10F of the  Erstwhile Act and thereby, affirming the order of the CLB condoning the delay of 249 days in filing the appeal under Section 58(3) of the Act, 2013.

# 162. In the result, this appeal succeeds and is hereby, allowed. The impugned judgement and order of the High Court is set-aside.

# 163. Pending applications, if any, shall also stand disposed of.

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Anil Kumar Mittal, RP of Surya Kant Jaipuria - We are of the considered view that the receipt or distribution of sale proceeds in the course of liquidation is merely a statutory consequence of the insolvency process and cannot, by itself, amount to an acknowledgment of debt by the Personal Guarantor or the Corporate Debtor. Such realisation does not satisfy the legal requirements of a conscious and voluntary acknowledgment capable of extending the period of limitation. Accordingly, the said contention of the Applicant is untenable.

  NCLT ND (2026.02.26) in Anil Kumar Mittal, RP of Surya Kant Jaipuria [(2026) ibclaw.in 285 NCLT, IA (I.B.C)/883(ND)2024 and IA (I.B.C)/ 4716(ND)2024 and IA (I.B.C)/232(ND) 2024 in C.P. (IB)/9(ND)2023] held that;

• We are of the considered view that the receipt or distribution of sale proceeds in the course of liquidation is merely a statutory consequence of the insolvency process and cannot, by itself, amount to an acknowledgment of debt by the Personal Guarantor or the Corporate Debtor. Such realisation does not satisfy the legal requirements of a conscious and voluntary acknowledgment capable of extending the period of limitation. Accordingly, the said contention of the Applicant is untenable.

• Once the Corporate Debtor stands liquidated and its assets have been dealt with in accordance with the provisions of the Code, the subsequent invocation of the Personal Guarantee, in the manner sought, would effectively amount to initiating a recovery proceeding under the guise of insolvency.

Excerpts of the Order;

# 1. The present petition is filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 by Canara Bank for initiation of Insolvency Resolution Process qua the Respondent/Personal Guarantor i.e., Mr. Surya Kant Jaipuria. This Adjudicating Authority vide order dated 21.12.2023 initiated Interim Moratorium under Section 96 of the Code and appointed Mr. Anil Kumar Mittal bearing registration no. IBBI/IPA-002/IP-N00742/2018-2019/12263 as the Resolution Professional to submit a Report within a stipulated time as per Section 99 of the Code. In compliance of order dated 21.12.2023, the Resolution Professional submitted a report under section 99 of the Code through IA/883/ND/2024. However, since the report was found to be under defect, the RP refiled its report under section 99 of the Code through IA (I.B.C)/4716(ND)2024.

# 2. FACTS OF THE CASE

a. The Canara Bank, vide its Sanction Letter dated 28.02.2015, bearing Reference No. SYNB/NOTICE/ICPL/2018, sanctioned various Working Capital Facilities in favour of the Corporate Debtor, M/s Integrated Caps Pvt. Ltd., aggregating to Rs. 33,95,43,000/- (Rupees Thirty-Three Crores Ninety-Five Lakhs Forty-Three Thousand only). The said facilities were stipulated to fall due for repayment on or before 27.09.2017.

b. It is submitted that the Corporate Debtor defaulted in the repayment of the Working Capital Facilities sanctioned by Canara Bank and, consequently, the loan accounts were classified as Non-Performing Assets (NPA) on 27.09.2017. Pursuant to the default, Canara Bank, vide its Guarantee Invocation Notice dated 09.03.2018 bearing No. SYNB/NOTICE/ICPL/2018, invoked the personal guarantee furnished by the Personal Guarantor and called upon him to discharge the outstanding dues under the said facilities. Thereafter, Canara Bank, through its Demand Notice in Form B dated 22.07.2022 issued to the Personal Guarantor, once again demanded repayment of the amounts due and payable under the sanctioned facilities.

c. It is submitted that a Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 was filed by Shri Bal Pratap Srikent against the Corporate Debtor, M/s Integrated Caps Private Limited, and the said Petition, bearing C.P. (IB) 74/ND/2018, was admitted by this Tribunal (New Delhi, Court–IV) vide Order dated 06.03.2018, thereby commencing the Corporate Insolvency Resolution Process (“CIRP”). Subsequently, an Application under Section 33 of the Code was filed by the Resolution Professional seeking initiation of the Liquidation Process of the Corporate Debtor, which was allowed by this Bench vide Order dated 01.02.2019.

d. The Applicant stated that an application under Section 54 of the Code was filed by the Liquidator of M/s Integrated Caps Private Limited seeking dissolution of the Corporate Debtor, which was allowed by this Bench vide Order dated 01.07.2021.

e. Canara Bank has claimed a total debt of Rs. 24,07,59,668.25 in its application filed under Section 95 of the Insolvency and Bankruptcy Code, 2016. In terms of Section 99 of the Code, the Resolution Professional is required to submit a report within ten working days of appointment, recommending admission or rejection of the said application. Pursuant thereto, the Resolution Professional called upon the Personal Guarantor, Mr. Surya Kant Jaipuria, to furnish proof and details of any repayment made to Canara Bank, by e-mail dated 29.12.2023 and by courier dated 28.12.2023.

f. The Personal Guarantor submitted a reply dated 01.01.2024 to the Resolution Professional, inter alia, raising the following contentions:

i. The application under Section 95 was filed on or about 10.11.2022, beyond three years from the date of declaration of NPA (27.09.2017) and invocation of the alleged guarantee (09.03.2018), and is therefore barred by limitation.

ii. Canara Bank had filed an Original Application before the DRT on 27.03.2018 claiming an outstanding amount of Rs. 28,79,95,483.98. Subsequently, the Bank received Rs. 19,92,99,267/- towards liquidation proceeds of the Corporate Debtor by December 2020, leaving a balance of Rs. 8,86,96,216.93. Accordingly, the present claim is disputed.

iii. The Bank has levied interest at 17.2% per annum, compounded monthly, allegedly contrary to the terms of the agreement and RBI guidelines, and has failed to give due credit of Rs. 19,92,99,267/-.

g. Upon consideration of the submissions of the Personal Guarantor, the Resolution Professional submitted that it formed the opinion that the application filed by Canara Bank on 10.11.2023 was within the period of limitation, as the cause of action subsisted until the dissolution of the Corporate Debtor vide Order dated 01.07.2021, and the limitation period of three years is to be reckoned therefrom. It was further observed that the amount claimed in the Original Application before the DRT was computed up to the date of its filing and, since the dues remained unpaid, interest continued to accrue. During the liquidation proceedings in 2021, amounts were disbursed to the Bank in three tranches and credited to three separate bank accounts in the following manner:

I. Account No. VAAOSLB192840472

i. Rs. 1.00 crore on 31.12.2019

ii. Rs. 10.00 lakh on 23.12.2020

II. Account No. VAAOSLB1928404745

i. Rs. 2.95 crore on 22.11.2019

ii. Rs. 32.99 lakh on 30.12.2019

iii. Rs. 50.00 lakh on 30.03.2020

III. Account No. 90491250001606

i. Rs. 10.00 crore on 01.10.2019

ii. Rs. 5.04 crore on 21.11.2019

These payments were duly appropriated towards the outstanding liability in accordance with banking norms and the applicable provisions of law.

h. It is submitted that a total sum of Rs. 19,92,99,267/- was recovered by Canara Bank through the liquidation proceedings of the Corporate Debtor up to the year 2020, which recovery was duly recorded and certified by this Hon’ble Tribunal vide Order dated 01.07.2021. However, owing to the continued accrual of interest on the unrecovered portion of the debt, the outstanding liability has increased substantially, and the total amount presently due and recoverable stands at Rs. 28,33,36,763.51/-, the bifurcation of which is set out hereinbelow.

i. In light of the above, and considering that the Personal Guarantee dated 27.03.2015 secures an amount of Rs. 34,06,00,000/-, the Bank is legally entitled to recover the outstanding sum of Rs. 28,33,36,763.51/- from the Personal Guarantors of the Corporate Debtor.

j. In compliance with the order dated 21.12.2023 of the Adjudicating Authority, the Resolution Professional submitted a report under Section 99 of the Code recommending for admission of the Application.

k. Submissions of the Resolution Professional with regards to the present application, is as extracted below: –

i. That this Tribunal, vide Order dated 21.12.2023, had appointed Applicant as the Resolution Professional in respect of the Respondent–Personal Guarantor.

ii. In compliance with the aforesaid Order and in discharge of his statutory duties, the Applicant issued a communication to the Personal Guarantor, Ms. Bubbles Sabharwal, calling upon her to furnish documentary proof and complete particulars of any repayments made to the Financial Creditor, Canara Bank. However, despite such request, no written response has been received from the Personal Guarantor.

iii. That the Financial Creditor, Canara Bank, vide its e-mail dated 27.12.2023, has furnished the relevant records and statements, which clearly demonstrate that no repayment whatsoever has been made by the Personal Guarantor towards the outstanding dues.

iv. In view of the above facts, and in compliance with the Order dated 21.12.2023 passed by this Hon’ble Tribunal, and in accordance with Section 99 of the Insolvency and Bankruptcy Code, 2016, the Applicant hereby submits his Report recommending admission of the Application filed by Canara Bank under Section 95 of the Code against the Personal Guarantor.

l. The Applicant has placed its reliance on the judgment of the Hon’ble NCLT, New Delhi Bench-II, in UCO Bank vs. Smt. Nishu Goel (IB-355/ND/2024), wherein it was held that payment made by a liquidator towards the dues of a creditor amounts to acknowledgment of debt, thereby extending the period of limitation. This principle has been further affirmed by the Hon’ble High Court of Kerala in CP Sreelal vs. District Collector, Thiruvananthapuram & Ors. [AIR 2007 KER 131], holding that the repayment of amount of debt to Creditor in any situation would amount to payment in terms of the provisions of Section 19 of Limitation Act, 1963, constitutes a valid acknowledgment for the purpose of limitation.

# 3. Reply on behalf of the Respondent/ Guarantor

a. The Respondent/ PG in its reply contended that the petition filed by the Bank is an abuse of the process of law, having been instituted by suppression and misrepresentation of material facts before this Hon’ble Tribunal. It is submitted that the Bank misled the Tribunal into taking cognizance of the petition and appointing the Resolution Professional, despite no case being made out or disclosed. The maintainability of the petition has accordingly been challenged by the Respondent by filing I.A. No. 232 of 2024, in which notice was issued by this Tribunal on 17.01.2024.

b. The Respondent submitted that it is neither an insolvent person nor is the present petition intended for resolution under the Code. The petition is a coercive and recovery-oriented measure adopted by the Bank, despite its receipt of Rs. 19,92,99,267/- pursuant to the liquidation of the Borrower Company. This material fact has been deliberately suppressed, as there is no disclosure in the petition regarding receipt of the said amount. The Bank has further suppressed the minutes of the CoC meeting pursuant to which the said sum was received in full and final settlement.

c. The PG submitted that the Bank has failed to disclose the manner in which the amount of Rs. 19,92,99,267/- has been adjusted. In any event, such adjustment is improper, as the Bank’s statement of account contains unauthorised entries and is not duly maintained. Further, for an alleged unliquidated debt, the Bank has simultaneously initiated insolvency proceedings against three Personal Guarantors, including two Directors of the Borrower Company, namely Mr. Biren Sabharwal and Mrs. Bubble Sabharwal, who are alleged beneficiaries of the loan amounts. No cause of action arises against the Respondent alone in respect of an unliquidated debt, and there is no basis to contend that any liquidated sum is outstanding solely from the Respondent.

d. The Respondent in its reply stated that that as per Article 137 of the Limitation Act applies to applications under the Insolvency and Bankruptcy Code, prescribing a limitation period of three years. For the purpose of computing limitation, the relevant dates, as submitted by the Respondent, are as follows: the account of M/s Integrated Caps Private Limited was declared NPA on 27.09.2017; a demand notice under Section 13(2) of the SARFAESI Act, 2002 was issued on 19.12.2017; upon receipt of the Respondent’s reply dated 02.01.2018, the Bank issued a further demand notice through its counsel on 17.01.2018; representations were made by the Respondent and his counsel on 31.01.2018 and 13.02.2018; and the Bank invoked the alleged personal guarantee vide letter dated 09.03.2018, which, according to the Respondent, was vague and did not specify the guarantee invoked, to which a reply was submitted on the same date.

e. The PG stated that the present petition, filed on or about 10.11.2022, has been instituted beyond three years from the date of declaration of NPA (27.09.2017), as well as the revocation and invocation of the alleged guarantee on 02.01.2018 and 09.03.2018, and is therefore barred by limitation and not maintainable. The Bank has consciously omitted any pleading on limitation to avoid scrutiny and summary rejection, and the petition is completely silent on this aspect.

f. The PG submitted that the RP has erroneously opined that the petition filed by Canara Bank on 10.11.2022 is within limitation, without citing any statutory provision or settled principle to support the conclusion that the cause of action subsisted until the dissolution of the Corporate Debtor on 01.07.2021. It is settled law that the cause of action to proceed against a Personal Guarantor arises within three years from the declaration of the borrower’s account as NPA and from the invocation or revocation of the deed of guarantee. In the present case, the guarantee was revoked on 02.01.2018 and invoked on 09.03.2018; consequently, the cause of action, if any, last arose on 09.03.2018 and the limitation period expired on 08.03.2021. The conclusion recorded by the Learned RP that the cause of action continued until dissolution is therefore without legal basis.

IA (I.B.C)/232(ND)2024

g. The Respondent further submitted that in the present case, the liquidation proceedings of the borrower company stand concluded and the borrower company was liquidated vide order dated 01.07.2021. The present application was filed by the Bank on or about 10.11.2022, i.e., after completion of the liquidation process. Therefore, this Tribunal lacks jurisdiction, and Section 60 of the Insolvency and Bankruptcy Code, 2016. The competent adjudicating authority, therefore, continues to be the Debt Recovery Tribunal.

h. It is submitted that the Bank is claiming a fictitious and unsubstantiated amount of Rs. 24,07,59,688.25 from the Respondent. In the Original Application dated 27.03.2018 filed before the DRT, the Bank had claimed a sum of Rs. 28,79,95,483.93. Subsequently, the Bank admitted to having received Rs. 19,92,99,267/- by 23.12.2020 pursuant to the liquidation of the Borrower Company and informed the DRT that the balance amount due was Rs. 8,86,96,216.93, as stated in the affidavit of its Chief Manager, Mr. Sachendra Kumar Vimal, filed in the proceedings pending before the DRT. The relevant potion is annexed herewith:

i. Despite the above, the Bank has, in the present proceedings, claimed an amount of Rs. 24,07,59,688.25 without disclosing the basis or manner of computation. No explanation has been furnished as to how, after receipt of Rs. 19,92,99,267/- against the earlier claim of Rs. 28,79,95,483.93, the alleged outstanding has been escalated to Rs. 24,07,59,688.25. Even assuming, without admitting, that a balance of Rs. 8,86,96,216.93 remained due after adjustment, the Bank has failed to justify how the said amount has been inflated to Rs. 24,07,59,688.25 in the application dated 10.11.2022.

j. The Applicant further submits that the Respondent is a businessman of repute, enjoying considerable goodwill in the public domain in India, and was never a Director of Integrated Caps Private Limited. The said company was at all relevant times controlled, managed, and operated by its directors, namely Mr. Biren Sabharwal and Mrs. Bubbles Sabharwal, with Mr. Biren Sabharwal acting as the Managing Director.

ANALYSIS AND FINDINGS

# 4. We have heard the learned counsel appearing for the respective parties and have meticulously examined the pleadings, submissions, and documents brought on record.

# 5. The issue for consideration is whether the present petition is within the limitation or not?

# 6. The Canara Bank, vide its Sanction Letter dated 28.02.2015 bearing Reference No. SYNB/NOTICE/ICPL/2018, sanctioned various Working Capital Facilities in favour of the Corporate Debtor aggregating to Rs. 33,95,43,000/- (Rupees Thirty-Three Crores Ninety-Five Lakhs Forty-Three Thousand only). The said facilities fell due for repayment on or before 27.09.2017.

# 7. That while availing the aforesaid facilities, as per the submissions of the RP, the Personal Guarantor, Mr. Surya Kant Jaipuria, executed a Personal Guarantee Agreement dated 27.03.2015 in favour of Canara Bank, thereby guaranteeing the due repayment of the facilities sanctioned to the Corporate Debtor.

# 8. That the Corporate Debtor, M/s Integrated Caps Private Limited, was admitted into the Corporate Insolvency Resolution Process in C.P. (IB) 74/ND/2018 vide Order dated 06.03.2018 passed by this Adjudicating Authority. Thereafter, the Resolution Professional of the Corporate Debtor filed an Application under Section 33 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Liquidation Process. The said Application was allowed, and the Corporate Debtor was ordered to be liquidated vide Order dated 01.02.2019 passed by this Bench.

# 9. That the Corporate Debtor defaulted in repayment of the debt sanctioned by Canara Bank and, having failed to regularize the account, was consequently classified as a Non-Performing Asset (NPA) on 27.09.2017. Accordingly, the date of default would be 29.06.2017.

# 10. We note, as per the submissions of the Learned Counsel for the Resolution Professional, that the quantum owed to Canara Bank at the time of initiation of the Original Application (OA) before the Debt Recovery Tribunal (DRT) was computed only up to the date of filing of the said application. It is pertinent to observe that, owing to the continued non-recovery of the outstanding dues, interest accrued on the principal amount, thereby enhancing the total liability of the Corporate Debtor. It is further recorded that a sum of Rs. 19,92,99,267/- was realised by the Bank through the liquidation process by the year 2020. Further, we take note of the affidavit filed by the Bank’s Chief Manager, Mr. Sachendra Kumar Vimal, in the proceedings pending before the DRT, wherein it is stated that the balance amount due was Rs. 8,86,96,216.93.

# 11. On the issue of limitation, we note that the Corporate Debtor initially defaulted in repayment of its financial obligations, pursuant to which the loan account was classified as a Non-Performing Asset (NPA) on 27.09.2017. Accordingly, the date of default computed would be 29.06.2017. Consequent thereto, Canara Bank invoked the Personal Guarantee furnished by the Personal Guarantor vide Guarantee Invocation Notice dated 09.03.2018.

# 12. The Applicant has placed reliance on the judgment rendered by the Hon’ble Kerala High Court concerning the enforceability of a personal guarantee issued in favour of the Kerala Financial Corporation. However, we find that the facts of the present case are distinguishable from those obtaining in the said judgment, and therefore, the ratio laid down therein is not applicable to the facts of the instant case.

# 13. The Article 137 of the Limitation Act, 1963 provides a 3 (Three) year of Limitation Period from the date when “Right to Apply” accrues. “The Right to Apply”, accrues when a default occurs. If the default has occurred over three years before the date of filing of the application, the application would be barred under Article 137 of the Limitation Act. The period of limitation is 3 years from the date of default. In the present case, the default occurred on 27.09.2017 (default occurred on 29.06.2017, 90 days prior to NPA). In absence of any acknowledgement, limitation expired on 27.09.2020 and we note from the perusal of record that Applicant has filed this present application on 10.11.2022. Further as per the facts of the case, the NPA was declared on 27.09.2017, so accordingly the date of default would be 29.06.2017 and the guarantee was revoked on 02.01.2018 by the PG on receipt of notice, thereafter, the bank invoked the alleged guarantee vide letter dated 09.03.2018.

# 14. The Hon’ble Supreme Court in Re: Cognizance for Extension of limitation (2022) directed that the period 15.03.2020 to 28.02.2022 be excluded in computing limitation. Applying this exclusion, even if we construe the date of NPA as default date, the limitation period stood extended upto only September 2022 and the Application was filed on application on 10.11.2022.

# 15. Further, upon perusal of the petition and the documents annexed thereto, we find that no acknowledgment of debt, as contemplated under Section 18 of the Limitation Act, 1963, has been placed on record. The Applicant has sought to rely upon the realisation of sale proceeds during the liquidation of the Corporate Debtor as constituting an acknowledgment of liability for the purposes of extending the limitation period. We are of the considered view that the receipt or distribution of sale proceeds in the course of liquidation is merely a statutory consequence of the insolvency process and cannot, by itself, amount to an acknowledgment of debt by the Personal Guarantor or the Corporate Debtor. Such realisation does not satisfy the legal requirements of a conscious and voluntary acknowledgment capable of extending the period of limitation. Accordingly, the said contention of the Applicant is untenable.

# 16. The PG has stated that vide sanction letter dated 28.02.2015, the ILC/FLC limit of Rs. 1,500 lakhs was restructured and was valid only up to 28.02.2016. However, despite expiry of the sanctioned period, the Borrower Company, in collusion with Bank officials, continued to utilise the LC facility thereafter without the consent, knowledge, or guarantee of the Personal Guarantor. It is submitted that the LC outstanding of Rs. 15,90,53,678.60 as on 15.03.2018 arose solely due to LCs aggregating approximately Rs. 31.85 crores opened after 28.02.2016. The outstanding amount, which stood at Rs. 6.04 crores as on 31.03.2016, escalated only due to such unauthorized extensions, which were contrary to the sanction terms. The issues raised involve disputed questions of fact and cannot be adjudicated by this Adjudicating Authority, rendering the present forum inappropriate for determination of the same.

# 17. Moreover, we note that an Original Application was filed before the Learned DRT in 2018, followed by the admission of a Section 9 application under the Code in 2018, culminating in the passing of a liquidation order against the Corporate Debtor. In this backdrop, it is evident that the present application filed by the Applicant does not partake the character of a resolution process in any manner; rather, it is in substance an attempt to recover the outstanding dues.

# 18. Once the Corporate Debtor stands liquidated and its assets have been dealt with in accordance with the provisions of the Code, the subsequent invocation of the Personal Guarantee, in the manner sought, would effectively amount to initiating a recovery proceeding under the guise of insolvency. Such an approach is impermissible, as the Insolvency and Bankruptcy Code, 2016 is not a forum for debt recovery but a mechanism aimed at time-bound resolution, failing which liquidation ensues. The intent and scheme of the Code cannot be permitted to be circumvented for the purpose of mere recovery.

# 19. In the matter B.K. Educational Services Private Limited v. Parag Gupta & Associates (2019)11SCC633 it was held that limitation cannot be extended except by operation of Section 18 or 19 of the Limitation Act. Thus, in absence of acknowledgment, the petition filed in 2023 is accordingly held to be barred by limitation.

# 20. In view of the foregoing discussion and for the reasons recorded hereinabove, this Adjudicating Authority holds that the report submitted by the Resolution Professional under Section 99 of the Insolvency and Bankruptcy Code, 2016 in IA (I.B.C)/4716(ND)2024 does not merit acceptance and is accordingly rejected. Since the report field by the Applicant/RP in IA (I.B.C)/883(ND)2024 was not on board, accordingly, the application stands dismissed and Application/objection filed by the Personal Guarantor i.e. IA (I.B.C)/ 232(ND)2024 stands allowed. Further, the application filed by the Applicant under Section 95 of the Insolvency and Bankruptcy Code, 2016 i.e. C.P. (IB)/9(ND)2023 stands dismissed as barred by limitation.

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