The National Company Law Tribunal (NCLT), Mumbai, on 22 October dismissed a petition filed by the State Bank of India (SBI) against personal guarantor Suranjan Kumar Santosh Chatterjee, seeking initiation of insolvency resolution proceedings over an alleged outstanding liability of Rs. 430,12,24,997.78, holding that the application was barred by limitation.
A Bench comprising Technical Member Prabhat Kumar and Judicial Member Sushil Mahadeorao Kochey held that an application under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking insolvency proceedings against a personal guarantor is barred by limitation when filed beyond three years from the date of default arising from invocation of the guarantee.
SBI had extended various credit facilities to Transtech Turnkey Private Limited, including corporate loans, cash credit, bank guarantees and letters of credit. Chatterjee had executed an irrevocable and unconditional Deed of Guarantee on 19 June 2007, guaranteeing repayment of all dues owed by the corporate debtor.
Following persistent defaults in repayment, SBI classified the loan account of the corporate debtor as a Non-Performing Asset (NPA) on 30 April 2015. SBI subsequently issued a Notice of Invocation of Guarantee dated 16 December 2015, which was received by the personal guarantor on 19 December 2015.
Relying on Ujwal Gupta v. Union Bank of India & Anr., (2026) ibclaw.in 18 NCLAT, the NCLT reiterated that where a guarantee is in the nature of an on-demand guarantee, a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, specifically calling upon the personal guarantor to discharge the outstanding dues, constitutes a valid invocation of the guarantee.
The Tribunal observed that SBI had validly invoked the personal guarantee through the notice dated 16 December 2015 issued under Section 13(2) of the SARFAESI Act. Since the guarantor failed to discharge the liability within 60 days of receiving the notice on 19 December 2015, the Bench determined the date of default as 17 February 2016. Accordingly, the limitation period expired on 16 February 2019.
However, SBI filed the present application under Section 95 of the IBC only on 23 June 2026, well beyond the prescribed limitation period.
Accordingly, the NCLT dismissed SBI's application as barred by limitation.
For the Petitioner: Adv. Yahya Batatawala
For the Resolution Professional: Adv. Ishika Parmar