Limitation under insolvency law runs from actual invocation of personal guarantee, not earlier intimation letters.

Proceedings under Section 95 of the Insolvency and Bankruptcy Code were not barred by limitation because the communications dated 29.01.2016 and 30.11.2018 were only intimation letters referring to default and a possible recall, not a definitive recall of the loan or a notice for initiating Section 95 action. They were also not treated as notice under Section 95(4)(b). The letter dated 03.08.2020 expressly invoked the personal guarantee and demanded payment, and was taken as the operative point for computing limitation under Article 137 of the Limitation Act. The limitation objection was rejected and the proceedings were held within time.

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Issues: Whether the proceedings initiated under Section 95 of the Insolvency and Bankruptcy Code, 2016 were barred by limitation on the basis of the communications dated 29.01.2016 and 30.11.2018, or whether limitation began only from the invocation of guarantee dated 03.08.2020.

Analysis: The earlier communications were held to be mere intimation letters referring to default and the creditor's right or intention to recall, and not a definitive recall of the loan or a notice contemplated for initiation of proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016. They were also not treated as a notice under Section 95(4)(b) of the Insolvency and Bankruptcy Code, 2016. The correspondence dated 03.08.2020, by contrast, expressly invoked the personal guarantee and called upon payment, and was treated as the effective point of invocation for computing limitation under Article 137 of the Limitation Act, 1963.

Conclusion: The limitation objection was rejected and the Section 95 proceedings were held to be within time.

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