Limitation and abuse of process bar repeated Section 94 petitions by a personal guarantor; NCLAT declined interference.

A personal guarantor's repeated Section 94 insolvency petition was rejected as time-barred because a demand notice had already been issued in 2017, and limitation was not shifted to the later possession notice. The later identical filing was also held not maintainable, as multiple petitions after earlier dismissals amounted to res judicata and abuse of process, with the filings viewed as attempts to secure an interim moratorium and stall recovery rather than pursue genuine insolvency resolution. Finding no infirmity in the adjudicating authority's order and noting withholding of material facts, the NCLAT declined interference, dismissed the appeal, and sustained costs for misuse of the insolvency process.

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Issues: (i) Whether the personal guarantor's Section 94 application was barred by limitation; (ii) Whether the subsequent petition was not maintainable on the ground of res judicata and abuse of process; (iii) Whether the appeal against dismissal of the Section 94 petition deserved interference.

Issue (i): Whether the personal guarantor's Section 94 application was barred by limitation.

Analysis: The record showed that a demand notice had been issued to the personal guarantor on 20.03.2017. A prior Section 94 petition filed in 2024 was dismissed as time-barred, and the present petition was a later, identical filing. The contention that limitation should run only from the possession notice dated 27.01.2022 was rejected because a demand notice had already been issued to the guarantor in 2017.

Conclusion: The petition was held to be barred by limitation against the appellant.

Issue (ii): Whether the subsequent petition was not maintainable on the ground of res judicata and abuse of process.

Analysis: Multiple Section 94 petitions had been filed by the appellant and another personal guarantor after the corporate debtor entered insolvency and liquidation. The repeated filings, after earlier dismissals, were treated as attempts to obtain interim moratorium and stall recovery proceedings rather than to seek genuine insolvency resolution.

Conclusion: The subsequent petition was held to be not maintainable as an abuse of process and hit by res judicata.

Issue (iii): Whether the appeal against dismissal of the Section 94 petition deserved interference.

Analysis: No infirmity was found in the adjudicating authority's order dismissing the petition. The appellant was also found to have withheld material facts, and costs were justified in the circumstances.

Conclusion: Interference was declined and the appeal was dismissed.

Final Conclusion: The dismissal of the personal guarantor's Section 94 petition was sustained, the appeal failed, and costs were imposed for misuse of the insolvency process.

Ratio Decidendi: Where a personal guarantor has already been issued a demand notice and has pursued repeated Section 94 proceedings after earlier dismissals, a later identical petition may be rejected as time-barred and as an abuse of the insolvency process intended to secure interim moratorium rather than genuine resolution.

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