Limitation for Section 95 IBC petitions commences from the date of demand under a continuing guarantee.

The Appellant, a suspended director of M/s. Theme Exports Pvt. Ltd. (Corporate Debtor), executed a "Deed of Continuing Guarantee" on 06.01.2017 in favor of Respondent No. 2 (Bank of Baroda) for credit facilities totaling approximately ₹30.12 crore

The Corporate Debtor’s account was classified as NPA on 07.01.2019, followed by a Section 13(2) SARFAESI notice on 27.02.2019, which the Bank characterized as the first invocation of the guarantee

The Corporate Debtor entered CIRP on 29.08.2019 and was subsequently ordered into liquidation on 29.07.2020

On 04.08.2020, the Bank issued a personal demand-cum-recall notice and filed a petition under Section 95 of the IBC on 30.12.2021

The Adjudicating Authority (NCLT, New Delhi) admitted the petition under Section 100 IBC on 04.09.2024

1. Whether the petition under Section 95 of the IBC was barred by limitation on the grounds that the cause of action arose upon the execution of the guarantee deed in 2017?

2. Whether inconsistencies in the debt amount claimed across different forums (DRT vs. NCLT) and the non-disclosure of the initial SARFAESI notice in the original petition invalidate the proceedings?

3. Whether the alleged conflict of interest and bias of the Resolution Professional (RP) is a valid ground to set aside the admission order under Section 100?

Sections 95 and 100 of the Insolvency and Bankruptcy Code, 2016 (IBC), regarding the insolvency resolution process for personal guarantors

For a "continuing guarantee," the period of limitation begins to run only from the date of express invocation/demand, rather than the date of execution

The ratio in Laxmi Pat Surana v. Union Bank of India (2021), distinguishing between prudential NPA classification and the juridical date of default

The Tribunal rejected the Appellant's limitation argument, observing that the guarantee was "continuing" and enforceable upon demand.

Since the Bank invoked the guarantee via a SARFAESI notice on 27.02.2019, the default crystallized on 27.04.2019; thus, the Section 95 petition filed on 30.12.2021 was well within the three-year limitation period

Regarding the discrepancy in debt amounts (₹32.17 crore in DRT vs. ₹36.93 crore in IBC), the Tribunal noted these reflected different cut-off dates and that Section 100 requires proof of the existence of a debt and default, not a final adjudication of the exact quantum, which is the RP's subsequent task

On the issue of RP bias, the Tribunal held that while a conflict of interest might justify replacing an RP, it does not constitute a legal basis for setting aside an otherwise valid admission order under Section 100

The Tribunal held that the petition was within the limitation period as the cause of action arose from the demand notice, not the deed's execution

The inconsistencies in the claimed amount were deemed insufficient to stall the insolvency process at the admission stage

The appeal was dismissed without costs