Case Overview

This appeal was filed by Mr. Subrata Sardar (Appellant) against an order from the Adjudicating Authority (NCLT) concerning an application filed against him under the Insolvency and Bankruptcy Code, 2016 (IBC), presumably by the Central Bank of India (Respondent No. 1). The core legal dispute pertains to the validity of invoking a personal guarantee provided by the Appellant and its implications on the limitation period for initiating the insolvency process.

The Appellant's primary contention, presented by Senior Advocate Mr. Sumant Batra, is that the purported invocation of his guarantee lacks a valid foundation. He argued that the notice dated 26 October 2017, issued by the Bank under Section 13(2) of the SARFAESI Act, which was presented as the invocation notice, was subsequently withdrawn. This withdrawal was supported by referencing the Bank's own admission in paragraph no. 2(t) of its written statement filed before the City Civil Court of Calcutta in Title Suit No. 2155 of 2022. The Appellant's counsel vehemently argued that since this foundational invocation notice was withdrawn and not acted upon, it cannot be used to extend the limitation period for filing the application, even through an acknowledgement of debt.

In response, the counsel for Respondent No. 1 (Central Bank of India), Mr. Tushar Singh, defended the application's validity on the grounds of acknowledgement of debt. He submitted that the issues raised by the Appellant were already settled by a coordinate bench of the NCLAT in judgment Comp. App. (AT) (Ins.) No. 45 of 2025, decided on 06 February 2026. This prior NCLAT order, which held that entries in a balance sheet can constitute a clear acknowledgement of debt for extending limitation, was affirmed by the Hon'ble Supreme Court on 04 May 2026 in Civil Appeal No. 6511 of 2026. The Respondent thus argued that the question of limitation was not an issue in the present case.

The Tribunal noted the arguments from both sides and acknowledged the existence of the previous judgment but stated it would need to assess the factual matrix of the present case vis-à-vis that earlier decision.

Final Outcome

The NCLAT did not deliver a final ruling on the merits of the appeal. Instead, it issued procedural directions for the further progression of the case. Respondent No. 1 (Central Bank of India) was granted two weeks to file a formal response or reply to the appeal. The Appellant was given one week thereafter to file a rejoinder. Furthermore, the Tribunal issued formal notice to Respondent No. 2 (whose identity is not specified in the provided text), directing the Appellant to complete the requisite steps for service within four working days. The case was adjourned and listed for the next hearing on 18 August 2026.

The final outcome of the insolvency application against the personal guarantor remains pending and subject to the outcome of this appeal.

Topics: Personal Guarantee, Insolvency, Limitation