The National Company Law Tribunal (NCLT) Kolkata Bench has held that the limitation period for initiating insolvency proceedings against a corporate guarantor commences from the date of invocation of the guarantee and not from the date on which the borrower’s account was declared Non-Performing Asset (NPA).
The Financial Creditor had extended various credit facilities to Sunbeam Dealers Private Limited the principal borrower. Initially, a cash credit facility of ₹2.5 crore was sanctioned in September 2014 which was later enhanced to ₹10 crore in September 2016. Bahubali Realbuild Private Limited stood as the corporate guarantor and executed a deed of guarantee in favour of the bank to secure repayment obligations…