Limitation and valid guarantee invocation defeated insolvency claim against personal guarantor

An application to initiate insolvency resolution against a personal guarantor was found not maintainable because the record showed inconsistent dates of default, undermining the limitation basis for the claim. The revival letter relied on to extend limitation was not filed with the application and was produced later, which cast doubt on its genuineness and evidentiary value. The notice under section 13(2) of the SARFAESI Act was treated as insufficient, on these facts, to establish valid invocation of the personal guarantee, particularly where the stated default date did not align with the notice date. The application was therefore held to be beyond limitation and procedurally defective, and it was rejected.

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Issues: Whether the application seeking initiation of insolvency resolution process against the personal guarantor was maintainable in view of limitation, disputed revival letter, and absence of proper invocation of the guarantee.

Analysis: The record showed inconsistent dates of default, including the date stated before the Information Utility and the later date asserted in the application. The revival letter, which was relied upon to extend limitation, was not filed with the application and was produced only later, creating doubt about its genuineness and evidentiary value. The notice issued under section 13(2) of the SARFAESI Act was treated as insufficient to establish valid invocation of the personal guarantee in the circumstances, especially when the stated date of default did not correlate with the notice date. On the available material, the application was found to be beyond limitation and procedurally defective.

Conclusion: The application was held not maintainable and was rejected.

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