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

Order Date: 07.08.2026

Case Overview

The appeal was filed by Prabhaben Ravjibhai Harkani (Appellant), a personal guarantor to M/s Shubham Ginning Pressing Pvt. Ltd. (Corporate Debtor), challenging the order dated 21.04.2025 passed by the National Company Law Tribunal, Ahmedabad Bench (Court-II) in CP(IB) No. 38 of 2025. The NCLT had rejected the Appellant's petition under Section 94 of the Insolvency and Bankruptcy Code, 2016 for initiation of personal insolvency process against herself on the ground of being barred by limitation.

The principal dispute centered around whether the Limitation Act, 1963 applies to proceedings under Section 94 of the IBC filed by a debtor themselves. The Appellant contended that the Limitation Act does not apply to applications filed by debtors under Section 94 (analogous to Section 10 for corporate debtors), relying on the Insolvency Law Committee Report, 2018 and judgments including BK Educational Services Pvt. Ltd. vs. Parag Gupta and Associates (2019) 11 SCC 633. The Appellant also argued that the Adjudicating Authority could not reject the application without first appointing a Resolution Professional under Section 97 and considering their report under Section 99, citing Dilip B. Jiwrajka vs. Union of India (2024) 5 SCC 435.

Respondent Bank of Baroda argued that the application was filed mala fide to obstruct SARFAESI recovery proceedings. The bank had invoked the personal guarantee on 19.09.2016 through a notice under Section 13(2) of the SARFAESI Act, and recovery proceedings had been ongoing since then. The bank had successfully auctioned the Appellant's properties on 24.12.2024, with M/s Pramukh Developers emerging as the successful bidder who had deposited EMD and 25% of the sale consideration. The Appellant filed the Section 94 application on 03.01.2025, after the auction was concluded.

Final Outcome

The NCLAT dismissed the appeal and upheld the NCLT's order. The Tribunal held that:

1. The provisions of the Limitation Act, 1963 apply to proceedings under Section 94 of the IBC, following its earlier decision in Suyog Jain vs. Arvind Kumar (2025) SCC.

2. Appointment of a Resolution Professional under Section 97 is not mandatory in all cases under Section 94. The Adjudicating Authority can reject an application at the maintainability stage if it finds the application time-barred or mala fide based on admitted facts.

3. The application was filed mala fide to obstruct lawful recovery proceedings, particularly after the SARFAESI auction had been successfully concluded and third-party rights had been created. The timing of the application (after auction conclusion) indicated abuse of process.

4. The conduct of the Appellant showed lack of bona fides, as she had earlier filed a Section 94 application in June 2023 which was dismissed on 20.11.2023 with liberty to file fresh petition, but she waited until January 2025 after the auction was conducted.

The Tribunal found no factual or legal infirmity in the NCLT order and dismissed the appeal with no order as to costs.

Topics: Personal Insolvency, Limitation Law, SARFAESI Act