The bankruptcy court, in dismissing the petition, noted that the lender had resorted to the court beyond the limitation period.
The division bank of Justice VG Bisht and a technical member Prabhat KumarIn dismissing the lender’s application, it noted that the guarantees issued by the personal guarantors were invoked on April 3, 2018, and the amount owed on the personal guarantees (PG) became due and payable within 60 days from the date of receipt of the notice and becomes default for non-payment of the amount stated in the notice after the expiration of 60 days.
“The statute of limitations expires on May 1, 2022,” the court said in its Aug. 27 ruling. However, the petitions against the personal guarantors were filed on May 25, 2023, so they have become time-barred and are dismissed as inadmissible, the court further ruled.
Prior to the court order, advocate Sneha Prabhu appeared on behalf of the company’s personal guarantors and argued that the petitions filed by the lender were barred by limitation as the Bank had first invoked the personal guarantee by issuing a notice under section 13(2) of the SARFAESI Act, 2002 in April 2018.
The counsel for 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 present petitions are unsustainable. The former promoter of Gopal Krishna Oil Tech Industries also argued that they were no longer liable as personal guarantors due to the changes in the corporate structure and the new guarantees executed by subsequent directors.
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