Authority: National Company Law Appellate Tribunal Principal Bench, New Delhi

Order Date: 21.08.2026

Case Overview

The appeal (Comp. App. (AT) (Ins) No. 1413 of 2026) was filed by Sharmila Khemka, Personal Guarantor of Nandini Impex Pvt. Ltd., against UCO Bank & Anr., challenging the order of the Adjudicating Authority (NCLT) that initiated insolvency resolution process under Section 95 of the Insolvency and Bankruptcy Code, 2016 against her as a personal guarantor to the corporate debtor.

The principal legal question revolved around the limitation period for filing the Section 95 application. The Appellant's counsel, Mr. Sanjiv Sen, Sr. Adv., argued that the petition was time-barred due to a discrepancy in the stated dates of default. The notice issued under Rule 7 of The Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, mentioned the date of default as 30.06.2012. In contrast, the Section 95 application itself stated the date of default as 30.09.2012. The petition was filed by the Respondent Bank on 12.04.2023. The Appellant contended that using either date would render the petition barred by limitation.

The Appellant further argued that the Adjudicating Authority erred in treating the notice given under Section 13(2) of the SARFAESI Act, 2002, as the date of invocation of the guarantee and the starting point for limitation. The Appellant relied on a precedent set by this Appellate Tribunal in Comp. App. AT (Ins) No. 383 of 2022 (order dated 02.04.2026), which states that the date of default mentioned in the demand notice and the petition should be considered the starting point for limitation.

The Tribunal, comprising Justice Mohammad Faiz Alam Khan (Member-Judicial) and Naresh Salecha (Member-Technical), heard the arguments and perused the records. It formed a prima facie opinion that, in the absence of a specific notice for invocation of the guarantee, a notice issued under Section 13(2) of the SARFAESI Act may be deemed to constitute a notice of invocation.

Final Outcome

The Appellate Tribunal declined to issue any interim order staying the proceedings before the Adjudicating Authority. Notice was issued to the Respondent (UCO Bank), with directions for the Appellant to complete all requisites and procedural steps within three days. However, it was expressly ordered that any further proceedings undertaken concerning the impugned order would be subject to the final outcome of this appeal. The appeal was listed for the next hearing on 24.09.2026.

Topics: Insolvency Law, Limitation Law, Personal Guarantee