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2025 (9) TMI 1410
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....on under Sec. 95 (with a difference of about one month between them), the facts in both the cases are the same. Therefore, the narration and discussion in this Order will be the same and wherever the date of filing of the petition before the Adjudicating Authority is relevant it will be indicated. Facts: 2. The material facts which are relevant for the current purpose are bullet pointed as below: a) The appellant is a Nationalised Bank. On 23.09.2009 it advanced a loan of Rs. 10.50 Crores to a certain Asis Global Limited, to which the 1st respondent in both the appeals had given a personal guarantee. The loan limit to the principal borrower was subsequently enhanced to Rs. 18.0 crores and then to Rs. 20.0 crores. The personal guarantors had duly executed supplementary personal guarantee agreements dated 30.07.2010 and 28.06.2012. b) The principal borrower however, did not repay the loan amount promptly and the loan was notified by the appellant as NPA. In these circumstances on 31.12.2013 the appellant issued a notice under Sec 13 (2) of SARFAESI Act, 2002 both to the principal borrower and also to the personal guarantor. Subsequently the appellant laid O.A ....
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.... (against the first respondent in C.A.282 of 2025) In Part III of these petitions the appellant had indicated that the debt fell due for payment on 28.02.2014. However, while explaining the nature of debt the appellant had provided two information: (a) that in the CD initiated CIRP, the claim of the appellant had been accepted; and (b) the demand notice dated 30.05.2022 that it had issued under Rule 7 (referred to above) as well as the reply of the personal guarantors to the same. 3. Before the Adjudicating authority the 1st respondent (in both the cases) appeared and contested. Their principal line of defence was that in Part III of the petition, the appellant had indicated the date of default in paying the debt as 28.02.2017. If this date is reckoned as the terminus a quo, debt will become time barred on 28.02.2017. If 31.10.2017, the date on which the OTS was accepted by the appellant limitation would end by 31.10.2020. If the date of the consent decree of the DRT (22.03.2018) is taken as the commencing date of limitation, the debt would be time barred on 21.03.2021. According to it, even if the period from 25.03.2020 to 28.02.2021, the period exempted vide Order of the Hon'b....
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....al guarantee. Reliance was placed on the ratio in Canara Bank Vs Hides International Ltd., [Manu/DA/0003/2015] c) that in Part III of the petition filed under Sec. 95 IBC, the date of default is mentioned as 28.02.2014, and hence the appellant cannot alter this date to reckon the terminus a quo. d) that the appellant now relies on three additional documents before this tribunal namely, the reply to the show cause notice dated 31.12.2018; the balance sheet of the CD for the year ending 31.03.2019, and the offer letter of ITS dated 31.07.2021, which have not been produced before the Adjudicating Authority which cannot be considered as per the ratio the Hon'ble Supreme Court in Xentis Infotech Ltd., Vs UCO Bank [C.A.9325 of 2022]. e) That the appellate tribunal cannot go beyond ascertaining the correctness of the line of reasoning of the tribunal below. 5.3 In response the learned counsel for the appellant submitted that the personal guarantors herein had neither pleaded this fact nor produced this document before the Adjudicating Authority, when they could have produced it, since the impugned orders were passed only on 09.12.2024. Discussion & Decisio....
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....nity to defend this letter. It is in that context the Hon'ble Supreme Court has noted that the document has been produced before the appellate tribunal and that the respondent has not got an opportunity to defend it. This judgement was more an authority in aid of the maxim audi alterem partem and procedural fairness, and not an authority for the proposition that the appellate tribunal shall not receive or consider additional documents, for that was not even an issue before the Hon'ble Supreme Court. On the other hand, Part XII Rule 73 of the NCLAT Rules enables the appellate tribunal to allow production of documents in terms of the provisions of the CPC, which implies that documents could be received at the appellate stage broadly on the same principles enunciated in Order XLI Rule 27 CPC. However, since the proceeding under the IBC is summary in nature, XLI Rule 28 may not apply, even though Part XIII of the NCLAT Rules provides for recording of even oral evidence by this tribunal. 8.2 What may now be deduced is that where the genuineness of the documents is not disputed and where they have a bearing on the outcome of the appeal, then there can be no bar on the appellate tribun....
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....Was the bank guarantee invoked by the appellant? Here personal guarantors contend that a notice under Sec. 13(2) of the SARFAESI Act cannot amount to invocation of personal guarantee based on the ratio of this tribunal in Amanjyot Singh case [2023 SCC OnLine NCLAT 1621]. That this judgement does not intend to make a proposition as was widely believed has since been clarified by this tribunal in Asha Basantilal Surana Vs SBI and others [C.A.(AT) (Ins) 84 of 2025, dated 15.05.2025]. Indeed, in Shantanu Jagadish Prakash Vs SBI & another [(2025)ibclaw.in 73 NCLAT] this tribunal has held that a notice under Sec. 13(2) of the SARFAESI Act is adequate enough demand for invoking personal guarantee. This has to be understood in the context of the ratio in Mahdoom Bava Bahrudeen Noorul Ameen Vs SBI & another [(2025) ibclaw.in 108 NCLAT], where this tribunal has held that invocation of personal guarantee must precede notice under Rule 7 issuing which is a statutory pre-condition for invoking Sec. 95 IBC. Therefore, there must first be a communication or notice to the personal guarantor demanding payment of debt which the principal debtor has not paid. This notice does not have any prescribed ....
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....al when it deals with issues under the IBC. For instance, can the second notice under Sec. 13(2) invalidate the effect of the recovery certificate which the DRT has passed? Very obviously it cannot. And, when the recovery certificate has crystalised the liability of the personal guarantor, a mere issuance of another notice under Sec. 13(2) cannot have any effect on the validity of the original demand for repayment. The purpose behind the second notice may be entirely different, which as stated above, must concern only the DRT. 14.1 Few relevant facts are now collated: a) The date of default as mentioned in Part III of the petition under Sec. 95 is 28.02.2014, whereas the limitation for instituting the PIRP would commence from 20.11.2018, the date on which the principal borrower laid its own CIRP under Sec. 10 IBC, or could be from 05.09.2019, the date on which the board of directors of the principal borrower approved its balance sheet for the year ending 31.03.2019. b) The PIRP, however were filed only on 30.11.2022 and 28.12.2022 as the case may be, some three years after 20.11.2018. 14.2 This now requires an understanding on two aspects: a) Given ....
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....tum of default in repaying the debt would have to be indicated as one of the facts constituting a cause of action and so is the date as to when this fact has happened. Merely because the IBC has prescribed a Form of pleading, that does not ipso facto imply that the date of default in paying the debt and the date of commencement of limitation for commencing a CIRP or PIRP should not be different. And, this distinction should neither be lost sight of, nor should they be confused. 16.1 Here, two authorities of the Hon'ble Supreme Court need consideration. The first is the ratio in Ramesh Kyamal Vs Siemens Games A Renewable Power Pvt. Ltd. [(2021) 3 SCC 224] and it is believed to be an authority for the proposition that the date of default as provided in Part IV of a petition for commencing a CIRP alone must be construed as the date for computing the period of limitation. A close reading of this judgement nowhere shows that the Hon'ble Supreme Court has ever proposed to declare the ratio such as the one attributed to it. That was a case where the controversy was whether the date of default as specified in Part IV of the petition can be shifted to an anterior date to beat the co....
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....oved the ratio of this tribunal, and to fortify its opinion it relied on the ratio in Dena Bank (now Bank of Baroda) Vs C. Shivakumar Reddy [(2021)10 SCC 330], where the Supreme Court has relied on Sec. 238A of the IBC which enabled the application of Limitation Act to any proceedings before the tribunals constituted under the Code. Incidentally the document which the Court relied on as providing an acknowledgement of debt for extending the limitation is the balance sheet of the CD. The Court merely took note of this fact, and proceeded to apply the Limitation Act to the facts that were available before it and did not require the financial creditor to amend the date of default in Form I. 16.3 Vidyasagar case was decided a few months after the judgement in Ramesh Kymal case was delivered, and most appropriately the latter case was not even cited before the Court, for Ramesh Kymal did not declare any law that date of default as provided in Part IV of Form I alone must be reckoned for computing the period of limitation. 16.4 The proposition that could now be deduced is that irrespective of the date of default as provided in Part IV of a petition for CIRP or Part III of a petitio....
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.... certain ratio which it did not. Similar has been the experience with Amanjyot Singh Vs Navneet Kumar Jain [2023 SCC OnLine NCLAT 1621], (which has been understood as declaring that a notice under Sec. 13(2) of the SARFAESI Act cannot be the basis for initiating a CIRP or a PIRP) which invited a clarification in Asha Basantilal Surana case [C.A.(AT) (Ins) 84 of 2025, dated 15.05.2025] that no such proposition was ever declared in that case. 18. To conclude this point, it must be held that the terminus a quo for commencement of limitation is 20.11.2018, the date of which the principal borrower had laid its debtor initiated CIRP proceedings under Sec. 10 IBC. The appellant has now produced a balance sheet of the principal borrower for the year ending 31.03.2019, which the board of directors had singed on 05.09.2019. If limitation period is computed from 05.09.2019, it would expire on 05.09.2022. The CIRP however, was laid 30.11.2022 (as regards C.A.246 of 2025) and 28.12.2022 (as regards C.A,282 of 2025) and here the counsel for the appellant relies on the Order of the Hon'ble Supreme Court in suo motu W.P.(C) 3 of 2020, dated 10.01.2022. Is the PIRP barred by time? 19. Befo....
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....2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings." The working of this Order is explained in Prakash Corporates Vs Dee Vee Projects Ltd., [(2022)5 SCC 112] where the Hon'ble Supreme Court has equated the eclipsed period due to above extracted suo motu Order to the period of exclusion as provided in Sec. 12 to 15 of the Limitation Act. It has held: "28.... A look at the scheme of the Limitation Act, 1963 makes it clear that while extension of prescribed period in relation to an appeal or certain applications has been envisaged under Section 5, the exclusion of time has been provided in the provisions like Sections 12 to 15 thereof. When a particular period is to be excluded in relation to any suit or proceeding, essentially the reason is that such a period is accepted by law to be the one not referable to any indolence on the part of the litigant, but being relatable to either the force of circumstances or other requirements of law (like that of manda....