Limitation in personal guarantor insolvency turns on actual guarantee invocation, not Form-B demand notice, with decree-based fresh limitation also relevant.

Form-B demand notice under the personal guarantor insolvency rules is only a demand notice and does not itself amount to contractual invocation of the guarantee; limitation for a section 95 application runs from actual invocation in terms of the deed. A decree obtained within limitation may create a fresh starting point, and later acknowledgments or promises to pay may also affect limitation, but only if the material facts are examined. The text notes that the adjudicating authority had not considered the corporate insolvency claim or the alleged acknowledgments, so the limitation question required fresh determination on the existing record.

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Issues: (i) Whether issuance of Form-B demand notice under the personal guarantor insolvency rules could be treated as invocation of the guarantee for computing limitation; (ii) whether the decree passed in the summary proceedings and later acknowledgments extended the limitation period for filing the section 95 application.

Issue (i): Whether issuance of Form-B demand notice under the personal guarantor insolvency rules could be treated as invocation of the guarantee for computing limitation.

Analysis: The relevant date for commencement of limitation was the date on which the personal guarantee was actually invoked. Form-B under the personal guarantor insolvency rules is only a demand notice and cannot substitute the contractual invocation of guarantee. The guarantor becomes liable when the creditor invokes the guarantee in terms of the deed, and default for the purpose of section 95 must exist before the notice under Rule 7(1) is issued. Therefore, the adjudicating authority erred in treating the Form-B notice as the operative invocation date.

Conclusion: The Form-B notice was not the invocation of guarantee, and limitation could not be computed from that notice; this issue is in favour of the appellant.

Issue (ii): Whether the decree passed in the summary proceedings and later acknowledgments extended the limitation period for filing the section 95 application.

Analysis: A decree obtained within the original limitation period can provide a fresh starting point for limitation, and the Covid-19 exclusion period also had to be considered. However, the impugned orders did not examine the effect of the creditor's claim in the corporate insolvency resolution process or the letters dated 17.03.2022 and 12.07.2022 said to contain acknowledgment or promise to pay. In the absence of findings on these material facts, the limitation question could not be conclusively resolved by the adjudicating authority on the existing record. The matter therefore required fresh adjudication.

Conclusion: The limitation issue arising from the decree and alleged acknowledgments was not finally determined on merits, and the proceedings were remitted for fresh consideration; this issue is in favour of the appellant.

Final Conclusion: The impugned orders were set aside and the insolvency proceedings were revived before the adjudicating authority for a fresh, reasoned decision on limitation after hearing the parties.

Ratio Decidendi: In personal guarantor insolvency proceedings, Form-B demand notice does not itself amount to invocation of the guarantee, and limitation must be assessed from the actual invocation and any legally effective subsequent acknowledgment or decree-based fresh cause of action.

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