Canara Bank Limited Vs Globiz Exim Private Limited (NCLT Mumbai)
Canara Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Global Exim Private Limited as the corporate guarantor for borrowings availed by Frost International Ltd. The Bank claimed a default of ₹7,42,06,10,813.68 as on 31.03.2025, stated the date of default to be 29.01.2025, and relied upon a demand notice dated 20.01.2025 invoking the corporate guarantee. The Bank contended that the principal borrower had defaulted, its account had been classified as NPA on 17.07.2018, recovery proceedings before the Debts Recovery Tribunal were pending, the principal borrower had been admitted into CIRP on 09.03.2023, the 20.01.2025 notice validly invoked the corporate guarantee, acknowledgements including NeSL authentication extended limitation, and consortium members possessed an independent right to invoke the guarantee.
The Corporate Debtor opposed the petition, contending that the guarantee had already been invoked through a demand notice dated 01.09.2018, which expressly referred to invocation of personal and corporate guarantees, named the Corporate Debtor as Noticee No. 17, demanded payment within five days, quantified the outstanding dues, and specified consequences of non-payment. According to the Corporate Debtor, the Financial Creditor deliberately suppressed this earlier notice, wrongly relied upon the subsequent notice dated 20.01.2025 to reset limitation, failed to establish valid service of the later notice, failed to reconcile the debt figures, and filed a petition barred by limitation under Article 137 of the Limitation Act read with Section 238A of the IBC. The Corporate Debtor also relied upon judicial precedents concerning suppression of material facts, limitation, acknowledgements, and on-demand guarantees.
