Authority: National Company Law Tribunal Mumbai Bench - I (Prabhat Kumar, Member Technical & Sushil Mahadeorao Kochey, Member Judicial)

Order Date: 18 June 2026

Case Overview

The petition was filed by State Bank of India (through Resolution Professional Mr. Ajit Kumar) under Section 95(1) of the Insolvency & Bankruptcy Code, 2016 read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019.

Mrs. Saranga A. Agarwal stood as personal guarantor for M/s. A. A. Estates Private Limited (Corporate Debtor) to secure credit facilities of ₹70 crores extended by SBI vide sanction letter dated 18 February 2012. The guarantee was executed through a Guarantee Agreement dated 18 February 2012 and reaffirmed through a Letter of Arrangement dated 18 March 2014.

The Corporate Debtor's loan account was classified as Non-Performing Asset (NPA) on 27 February 2015. SBI invoked the personal guarantee through a demand notice dated 2 March 2015 under Section 13(2) of the SARFAESI Act, and subsequently issued a Recall Notice dated 5 April 2016 for the outstanding amount of ₹72,00,86,423.79 plus interest. The respondent received this notice on 9 April 2016 but failed to make payment, leading to default from 16 April 2016.

The total debt claimed as due and payable by the personal guarantor as of 31 December 2021 was ₹1,53,34,56,159.36 (One Hundred Fifty-Three Crores Thirty-Four Lakhs Fifty-Six Thousand One Hundred Fifty-Nine Rupees and Thirty-Six Paise) with further interest and charges.

The respondent contested the petition on grounds of limitation, arguing that the original invocation dated 2 March 2015 made the petition filed on 20 January 2022 time-barred. She also challenged the authorization of SBI's officer and claimed the Resolution Professional's report was mechanical.

Kotak Mahindra Bank Limited filed an intervention application (IVN.P (IBC)/68/2024) alleging the respondent violated the interim moratorium under Section 96 of the Code by dealing with assets over which Kotak claimed exclusive security interest.

The Tribunal examined multiple acknowledgments of debt including a Letter of Acknowledgment dated 31 January 2018, payment arrangement correspondence dated 5 February 2018, audited financial statements for FY 2015-2016 to 2019-2020, and One-Time Settlement proposals dated 1 October 2020, 13 October 2020, 11 February 2021 and 16 February 2021. Clauses 13 and 14 of the Guarantee Agreement specifically provided that acknowledgments by the corporate debtor would bind the guarantors.

The Tribunal also considered the exclusion of the limitation period from 15 March 2020 to 28 February 2022 as per Supreme Court orders in Suo Motu WP (Civil) No. 3 of 2020.

Final Outcome

The Tribunal admitted the petition and initiated the insolvency resolution process against Mrs. Saranga A. Agarwal. Key directions include:

  • Declaration of moratorium for 180 days from the date of admission (18 June 2026) staying all legal proceedings against the debtor and prohibiting asset transfers
  • Appointment of Mr. Ajit Kumar (IBBI Registration No. IBBI/IPA-003/IP-N00062/2017-2018/10548) as Resolution Professional
  • Direction to publish public notice on NCLT website inviting claims within 21 days
  • Requirement for SBI to deposit ₹75,000 to the RP's bank account within one week towards fees and expenses
  • Kotak Mahindra Bank's intervention application was allowed only for taking submissions on record without granting any relief

The Tribunal found the debt and default established, the petition within limitation due to acknowledgments and COVID exclusions, and all statutory requirements complied with.

Topics: Personal Guarantor Insolvency, Debt Recovery, Limitation Law