Mumbai: The National Company Law Tribunal (NCLT) has dismissed an application filed by Indian Bank seeking to initiate an insolvency resolution process against personal guarantor Salim Jaka, holding that the petition was hopelessly barred by limitation and liable to be dismissed.
Debt of over ₹95 crore cited in application
The tribunal noted that the total outstanding debt, including interest and penal charges, amounted to Rs 95,11,38,728.02. The alleged default occurred on 28.11.2015, which meant the limitation period expired on 27.11.2018. However, the present proceedings were initiated only on 30.12.2023, well beyond the prescribed three-year period.
Resolution Professional pulled up for delay
Despite this, the Resolution Professional (RP), appointed on 03.10.2024, failed to comply with Section 99(1) of the Insolvency and Bankruptcy Code. He filed his report nearly four months late, on 30.01.2025, without valid justification, and still recommended admission of the petition.
The NCLT held that such unexplained delay and disregard of the limitation bar caused undue hardship to the personal guarantor, and the belated report could not be taken on record.
Guarantee linked to I.B. Commercial Pvt Ltd loan
The case concerned a personal guarantee provided by Jaka for a loan allegedly extended to I.B. Commercial Private Limited, the principal borrower. As of 30.09.2023, the debt was stated to be over Rs 95.11 crore.
Tribunal agrees with limitation argument
The financial creditor, Indian Bank, based its application on a demand notice dated 05.11.2023. However, Jaka’s counsel argued that the petition was time-barred. He submitted that the default date should be reckoned from the expiry of the 60-day period stipulated in the SARFAESI notice dated 29.09.2015, which ended on 28.11.2015. Accordingly, the last day to file a petition was 27.11.2018, under Article 137 of the Limitation Act, 1963.
The NCLT agreed, observing that the financial creditor itself, in multiple documents—including Part III of its application and the annexed Form-B demand notice—had acknowledged 28.11.2015 as the date the debt became due.
Order dated 17.09.2025
In its order dated 17.09.2025, the tribunal held that: “The ‘date of default’ for the purpose of limitation must be reckoned as 28.11.2015, being the date on which the guarantee was invoked. The mere pendency of SARFAESI proceedings or recovery actions does not extend the limitation period.”
Since the application was filed on 30.12.2023, the tribunal concluded it was “clearly beyond the three-year limitation, which expired on 27.11.2018.”
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Application dismissed
The bench also criticized the conduct of Resolution Professional Neehal Mahamulal Pathan, who, despite explicit directions, failed to address the limitation issue in his belated report and yet recommended admission of the petition. The tribunal held that the RP’s omission could not cure the substantive limitation bar.
Consequently, the NCLT dismissed the application and disposed of the related interlocutory application as infructuous.
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