Authority: National Company Law Tribunal (NCLT), Division Bench, Court-I, Ahmedabad

Order Date: 13 July 2026

Case Overview

This common order pertains to four Company Petitions (C.P.(IB) Nos. 149, 151, 153, and 154 of 2025) filed by Omkara Assets Reconstruction Pvt. Ltd. (Financial Creditor) under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016. The petitions sought initiation of the Insolvency Resolution Process (IRP) against four Personal Guarantors to the Corporate Debtor, M/s. Ashmita Papers Private Limited: Ms. Darshana Tarun Jain, Smt. Kirandevi Agrawal, Mr. Tarun Kailashchand Jain, and Smt. Munnidevi Kailashchand Jain.

The financial debt of ₹224,78,37,463.24 arose from credit facilities extended by the State Bank of India (SBI) to Ashmita Papers, which were secured by Deeds of Guarantee executed by the respondents on 17 September 2010 and 1 October 2012. SBI assigned this debt, along with all securities and guarantees, to Omkara ARC via an Assignment Agreement dated 7 September 2018.

The petitions had previously been dismissed by the NCLT on 8 April 2025 on the grounds of limitation. Omkara ARC appealed to the NCLAT, which set aside the dismissal order on 31 October 2025 and remanded the matters back to the NCLT for fresh consideration, keeping all issues open.

Upon remand, an Interim Resolution Professional (IRP), Mr. Vinodkumar Surendralal Shah, was appointed. He submitted reports under Section 99 of the IBC recommending rejection of the petitions, primarily on the grounds that the claims were barred by limitation and that the guarantees were not validly invoked. The Personal Guarantors and Union Bank of India (a separate creditor with its own recovery proceedings) filed replies opposing the IRP's recommendations and the petitions.

The key issues adjudicated were: (i) whether the guarantees were validly invoked; (ii) whether the petitions were within limitation; (iii) whether the IRP's report under Section 99 should be accepted; and (iv) whether the applicant established debt and default under Section 100 of the IBC.

The tribunal held that a notice dated 1 May 2013, issued under Section 13(2) of the SARFAESI Act by SBI, which specifically called upon the guarantors to discharge their liability, constituted a valid invocation of the on-demand guarantees. On limitation, the tribunal found that the right to proceed against the guarantors accrued from 1 July 2013 (after the 60-day notice period). This period was extended by successive acknowledgments of liability through One Time Settlement (OTS) proposals submitted on 8 February 2016, 21 March 2019, 1 September 2019, and 5 July 2022, and a part-payment made on 25 April 2017. Furthermore, the period from 15 March 2020 to 28 February 2022 was excluded from limitation computation as per orders of the Supreme Court. Consequently, the petitions filed on 28 March 2025 were held to be within limitation.

The tribunal rejected the recommendations in the IRP's Section 99 report, finding its conclusions on invocation and limitation to be legally unsustainable. It found that Omkara ARC had successfully established the existence of a financial debt, a default, and the enforceability of the guarantees. Objections raised by Union Bank of India regarding its separate securities were noted but deemed not to affect the maintainability of these proceedings against the personal guarantors.

Final Outcome

The NCLT admitted all four Company Petitions under Section 100 of the IBC, thereby initiating the Insolvency Resolution Process against the four Personal Guarantors. A moratorium under Section 101 of the IBC commenced immediately and will last for 180 days or until approval of a repayment plan, whichever is earlier. The appointed IRP, Mr. Vinodkumar Surendralal Shah, was confirmed as the Resolution Professional to conduct the process. The connected Interlocutory Applications (IAs) filed under Section 99 were disposed of.

Topics: Personal Guarantor Insolvency, Debt Assignment, Limitation Law