The National Company Law Tribunal in Mumbai has dismissed the Bank of Maharashtra’s application to initiate insolvency resolution proceedings against the personal guarantors of Gopal Krishna Oil Tech Industries Pvt. Ltd.
The bankruptcy court, while dismissing the application observed that the lender had approached the tribunal beyond the period of the limitation.
The division bench of Justice VG Bisht and a technical member Prabhat Kumar, while dismissing the lender’s application observed that the guarantees issued by personal guarantors stood invoked on April 3, 2018, and the amount due from the personal guarantees (PGs) became due and payable within 60 days from the date of receipt of the notice and becomes in default of the nonpayment of the amount stated in the notice after expiry of 60 days.
“The limitation period expires on May 1, 2022,” observed the tribunal in its order of August 27. However, the petitions against personal guarantors were filed on May 25, 2023, it is barred by the limitation and is dismissed as not maintainable, ruled the tribunal further.
Before the tribunal’s order, counsel Sneha Prabhu appeared for the personal guarantors of the company and argued that the petitions filed by the lender were barred by limitation as the Bank had first invoked the personal guarantee by issuing notice under section 13(2) of SARFAESI Act 2002 in April 2018.
The counsel for the the respondents also argued that even after considering the extension granted due to Covid 19 pandemic, the present petitions are barred by limitation and therefore the current petitions are untenable.
The erstwhile promoter of the Gopal Krishna Oil Tech Industries also argued that they were no longer liable as personal guarantors due to changes in the corporate structure and new guarantees executed by subsequent directors.
