Limitation for personal guarantor insolvency starts on guarantee invocation; a later demand notice does not revive time.

For insolvency proceedings against a personal guarantor, limitation runs from invocation of the guarantee, not from a later demand notice. A notice issued under Section 13(2) of the SARFAESI Act was treated as the starting point, and a subsequent demand notice could not extend or revive limitation. Objections that proceedings against one personal guarantor were impermissible, or that CIRP pendency or resolution plan approval for the principal borrower barred action against the guarantor, were rejected. On the stated dates, the Section 95 application was filed beyond the limitation period and was liable to be rejected.

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Issues: Whether the application under Section 95 of the Insolvency and Bankruptcy Code, 2016 for initiating insolvency resolution against the personal guarantor was barred by limitation, and whether the subsequent demand notice could extend or revive limitation.

Analysis: The guarantee was invoked by notice dated 12.12.2017 under Section 13(2) of the SARFAESI Act, 2002, and that invocation was treated as the starting point for limitation. A later demand notice dated 31.10.2020 could not be used to compute limitation afresh. The objections that proceedings against one personal guarantor were impermissible, or that pendency of CIRP or resolution plan approval of the principal borrower barred action against the guarantor, were rejected. On the admitted dates, the application filed on 21.12.2021 was beyond the limitation period.

Conclusion: The application was barred by limitation and was liable to be rejected.

Ratio Decidendi: For proceedings against a personal guarantor, limitation runs from the date of invocation of the guarantee, and a subsequent demand notice does not restart the limitation period.

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