Zameer Pawan Kumar Agarwal & Ors vs Pankaj Prabhudayal Goenka, RP of Personal Guarantor & Ors. - The application which was filed on 14.03.2023 was clearly barred by time. We do not find any error in the order of the Adjudicating Authority rejecting Section 94 application as barred by time.

NCLAT (2025.12.01) in Zameer Pawan Kumar Agarwal & Ors vs Pankaj Prabhudayal Goenka, RP of Personal Guarantor & Ors.[(2025) ibclaw.in 1044 NCLAT, Comp. App. (AT) (Ins) No. 1118, 1120 & 1121 of 2025] held that;-

• These appeals have been filed against the order dated 16.05.2025 by which Section 94 application filed by the Appellant has been dismissed as barred by time.

• The Limitation against the Appellant to file or take steps for resolution under IBC, arose atleast from the date when recovery certificate was issued. The mere facts that the Appellant gave and OTS proposal to BoB shall not give any benefit under Section 18 to the Appellant for computing the Limitation from 12.06.2017.

• The application which was filed on 14.03.2023 was clearly barred by time. We do not find any error in the order of the Adjudicating Authority rejecting Section 94 application as barred by time.

Blogger’s comments; NCLAT upheld the orders of AA in which section 94 application was rejected on the following grounds;

1. Application is time barred.

The question is,-          

• “Whether limitation is required to be looked into in an application filed under section 94 of the IBC.”

Hon’ble Supreme Court (1992.04.20) in Punjab National Bank And Ors vs Surendra Prasad Sinha (Criminal Appeal No. 254 of 1992.) held that;

• "The rules of limitation are not meant to destroy  the rights of the parties.  Section 3 of  the Limitation Act only bars the remedy, but does not destroy the right which the remedy relates to. The right to  the debt continues to exist notwithstanding the remedy is barred by the limitation. .

Further Hon’ble Supreme Court (2018.10.11) in B.K. Educational Services Private Limited Vs. Parag Gupta and Associates [Civil Appeal  No.23988 of 2017] has in length noted the difference between debt “due and payable” from debts “due and recoverable”. 

• # 20. Shri Dholakia went on to cite Bhimsen Gupta v. Bishwanath Prasad Gupta, (2004) 4 SCC 95, and In re Sir Harilal Nemchand Gosalia, AIR 1950 Bom 74, for the proposition that debts “due and payable” must be differentiated from debts “due and recoverable”. . . .

•  . . . . .In the case of Bombay Dyeing & Mfg. Co. Ltd. v. State of Bombay [AIR 1958 SC 328] it has been held that when the debt becomes time-barred the amount is not recoverable lawfully through the process of the court, but it will not mean that the amount has become not lawfully payable. Law does not bar a debtor to pay nor a creditor to accept a barred debt.” 

In the teeth of Hon’ble Supreme Court observations that Law does not bar a debtor to pay nor a creditor to accept a barred debt., how come section 94 application can be time barred.

Excerpts of the Order;

(Hybrid Mode) 01.12.2025 Heard Ld. Counsel for the Appellant and the Respondent.

These appeals have been filed against the order dated 16.05.2025 by which Section 94 application filed by the Appellant has been dismissed as barred by time.

Brief facts necessary for deciding the appeals are: the Appellants are Personal Guarantor to the Corporate Debtor namely the "Roselabs Bioscience Limited", various financial facilities were extended to the CD to which the Appellants stood as Personal Guarantors. There was default by CD. Financial Creditor issued the demand notice under Section 13(2) and thereafter filed an application under Section 19 of the Debt Recovery Act, 1993 and the Debt Recovery Tribunal allowed the application in O.A. No. 437 of 2025 on 12.06.2017, recovery certificate was also issued. The Appellant filed Section 94 application on 14.03.2023.

In the application Resolution Professional was appointed who recommended for admission of Section 94 application. The Personal Guarantor (Appellant) also filed an affidavit opposing the application. Adjudicating Authority heard the parties, by the impugned order it held that application having been filed beyond the Limitation is to be rejected.

Ld. Counsel for the Appellant challenging the order submits that the Appellant has given a settlement proposal to Bank of Baroda on 23.02.2022, hence the application filed on 14.03.2023 cannot be barred by Limitation. He further submitted that after recovery certificate which was issued on 12.06.2017, three years period expired during the period under Section 10A, hence the Appellant shall also be entitled to benefit of the order of the Hon'ble Supreme Court in Suo Moto Writ Petition 3 of 2020.

Ld. Counsel for the Bank refuting the submission submits that the application was barred by time the cause of action to the Appellant to pray for its resolution under Section 94 arose when demand notice was issued in 2015 and when recovery certificate was issued on 12.06.2017. Within three years period, the Appellant did not initiate the proceedings, he further submits that even after giving the benefit of period from 25.03.2020 to 28.02.2022 the application is still barred by time. He submits that the OTS given by Bank of Baroda shall not give an extension of Limitation under Section 18 of the Limitation Act to the Appellant.

We have considered the submissions of the parties and perused the record.

Ld. Counsel for the Respondent submitted that infact the demand notice was issued on 24.08.2015. It is true that the Appellant defaulted in re-payment when the demand notice was issued in the year of 2015 by the Financial Institution, however, even accepting the case of the Appellant that he will have further 3 years period after the recovery certificate was issued on 12.06.2017, we need to examine as to whether application filed on 14.03.2023 is within time, giving the benefit of date 12.06.2017 when recovery certificate was issued.

Section 18 of the Limitation Act provides effect of acknowledgement in writing.

• Section 18(1) provides as follows: -

• Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

OTS proposal is given by the Appellant to Bank of Baroda. Section 18 cannot be applicable in extending the Limitation against the BoB. The Limitation against the Appellant to file or take steps for resolution under IBC, arose atleast from the date when recovery certificate was issued. The mere facts that the Appellant gave and OTS proposal to BoB shall not give any benefit under Section 18 to the Appellant for computing the Limitation from 12.06.2017. By giving the benefit of the period under the order of the Hon'ble Supreme Court in Suo moto Writ Petition the Limitation shall expire in 2022.

The application which was filed on 14.03.2023 was clearly barred by time. We do not find any error in the order of the Adjudicating Authority rejecting Section 94 application as barred by time. We do not find any merit in these appeals.

Appeals are dismissed accordingly.

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