Limitation for Section 95 insolvency proceedings runs from effective guarantee invocation, not earlier default communications.

Communications merely intimating default and expressing an intention to proceed do not amount to a definitive recall of the loan or the statutory notice for initiating proceedings under Section 95 of the Insolvency and Bankruptcy Code. On the stated facts, the letters dated 29.01.2016 and 30.11.2018 were treated as background correspondence, while the guarantee invocation dated 03.08.2020 was the operative demand calling for payment of the outstanding dues. Limitation under Article 137 of the Limitation Act was therefore computed from 03.08.2020, not from the earlier communications, and the limitation objection failed.

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

Analysis: The communications dated 29.01.2016 and 30.11.2018 were treated as intimation of default and an expression of the creditor's intention to proceed, not as a definitive recall of the loan or as the statutory notice required for initiation of proceedings under Section 95. The communication dated 03.08.2020 specifically invoked the personal guarantee and called upon payment of the outstanding dues, and was therefore treated as the effective invocation of the guarantee. On that basis, the limitation period under Article 137 of the Limitation Act was computed from 03.08.2020, not from the earlier correspondence.

Conclusion: The proceedings under Section 95 were not barred by limitation and the limitation objection failed.

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