Authority: National Company Law Tribunal, Mumbai Bench

Order Date: 13.07.2026

Case Overview

The petition was filed by Omkara Assets Reconstruction Private Limited under Section 95 of the Insolvency and 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. The financial creditor sought initiation of insolvency resolution process against Mrs. Ritu Jankiprasad Shah as personal guarantor for corporate debtor Maharashtra Steel Pvt. Ltd.

The dispute originated from credit facilities aggregating ₹45 crores sanctioned by State Bank of India (Sterling Branch) to the corporate debtor on 19.11.2009, secured by personal guarantees from Janki Prasad Shah and Ritu Janki Shah, and corporate guarantees from Maharashtra Steel Rolling Mills Pvt. Ltd. and Maharashtra Steels Investments Pvt. Ltd. The account was classified as NPA on 31.01.2014 with a default amount of ₹41,43,72,431. SBI invoked the personal guarantee via SARFAESI notice on 02.07.2014. The debt was subsequently assigned to ASREC (India) Limited on 28.11.2019 and then to Omkara ARC on 17.03.2022.

The core legal issue was whether the petition filed on 15.10.2025 was within limitation. The petitioner argued that acknowledgments in financial statements for 2016-17 and One Time Settlement proposals dated 27.05.2024, 08.07.2024, and 16.01.2025 extended limitation. The respondent contended that cause of action accrued on 02.07.2014 (invocation date), making the petition time-barred as limitation expired on 31.08.2017, and subsequent acknowledgments cannot revive time-barred debt.

Final Outcome

The NCLT Mumbai Bench dismissed the petition as barred by limitation. The tribunal held that:

  • Cause of action first accrued on 31.08.2014 (expiry of notice period)
  • Limitation period expired on 31.08.2017
  • Even considering financial statement acknowledgment (31.03.2017) and COVID exclusion period (15.03.2020 to 28.02.2022 plus 90 days), the outer limitation period expired on 29.05.2022
  • The OTS proposals of 2024-2025 were conditional offers requiring acceptance and did not constitute clear and unconditional promises to pay under Section 25(3) of Contract Act
  • Documents from Maharashtra Steels Investment Private Limited did not acknowledge liability toward petitioner
  • The petition filed on 15.10.2025 was well beyond the limitation period

Topics: Insolvency Proceedings, Limitation Law, Personal Guarantee