6 days ago
NCLT Rejects Canara Bank’s ₹742 Crore Insolvency Plea Over Limitation
Canara Bank asked a tribunal to begin insolvency proceedings against N.S.D. Nirman.
The bank said the company owed ₹742.06 crore as a corporate guarantor.
The tribunal looked at when the bank first demanded payment.
It found that the guarantee was already invoked in a notice dated September 1, 2018.
The company had five days to pay, so the legal time limit began on September 6, 2018.
The law generally gave the bank three years to file this type of case.
The bank later sent another demand notice in January 2025.
The tribunal said that later notice could not restart the expired time limit, so it rejected the case.
The NCLT Mumbai bench rejected Canara Bank’s ₹742.06-crore insolvency petition against N.S.D. Nirman Private Limited.
The bank sought proceedings under Section 7 of the Insolvency and Bankruptcy Code against a corporate guarantor for Frost International Limited.
The tribunal ruled that the guarantee was invoked through a September 1, 2018 notice, not the January 20, 2025 notice.
Because the guarantee allowed five days for payment, limitation began on September 6, 2018, under the tribunal’s reasoning.
The tribunal said the three-year limitation period had expired and a later demand could not revive the claim.
- Who
- Canara Bank and N.S.D. Nirman Private Limited were the main parties; Frost International Limited was the principal borrower.
- What
- The National Company Law Tribunal rejected Canara Bank’s Section 7 insolvency petition seeking recovery of ₹742.06 crore from N.S.D. Nirman.
- Where
- The case was decided by the Mumbai bench of the National Company Law Tribunal.
- When
- The Mumbai bench issued its ruling on August 26, 2026; the relevant notices were dated September 1, 2018, and January 20, 2025.
- Why
- The tribunal held that the claim was filed after the three-year limitation period had expired and that the 2025 notice could not revive it.
Canara Bank’s Position
Tribunal’s Finding
Date of guarantee invocation
Canara Bank’s Position
Canara Bank relied on the January 20, 2025 notice and contended that the guarantee was invoked through that notice.
Tribunal’s Finding
The tribunal found that the guarantee had already been invoked by the September 1, 2018 notice, which gave five days for payment.
Effect of the 2025 notice
Canara Bank’s Position
The bank sought to proceed against N.S.D. Nirman based on its later demand and claimed amount.
Tribunal’s Finding
The tribunal held that a fresh demand could not create a new cause of action or revive a time-barred claim.
Independent proceedings against guarantor
Canara Bank’s Position
The bank pursued insolvency proceedings against the corporate guarantor separately from the principal borrower.
Tribunal’s Finding
The tribunal clarified that such proceedings can be independent but must still be filed within the applicable limitation period.
Key facts
- Claim amount
- ₹742.06 crore as of March 31, 2025, excluding future interest, costs and charges
- Applicant
- Canara Bank
- Respondent
- N.S.D. Nirman Private Limited
- Principal borrower
- Frost International Limited
- First guarantee notice
- September 1, 2018
- Later demand notice
- January 20, 2025
- Limitation period
- Three years under Article 137 of the Limitation Act, 1963
Quotes
NCLT Mumbai bench
The tribunal bench that adjudicated Canara Bank’s insolvency application against N.S.D. Nirman
“The subsequent demand notice dated 20.01.2025 cannot revive a time-barred claim.”
freepressjournal.in
Sources
Related news
NCLT Admits Bank of Maharashtra Insolvency Plea Against Tirumalla Storehouse
NCLT Orders Insolvency Process Against Essel Infraprojects Over ₹87-Crore Default
Mumbai NCLT Admits Insolvency Proceedings Against Landmark Motels Default
Subhash Chandra Challenges NCLT Bench as NCLAT Appeal Waits
NCLT Stays Subhash Chandra’s Repayment Plan, Bars Asset Sales
Sources Clarify Subhash Chandra’s NCLT Claims, Reject ₹22,000 Crore Write-Off
Politics Heats Up as Uttarakhand, Uttar Pradesh Polls Near
Teen Allegedly Gangraped on Moving Delhi Bus; Two Arrested
Mayawati to Review BSP Preparations for 2027 Elections
Ayodhya Temple CEO Appointment Faces Opposition Donation Allegations
UP Government Releases ₹101.49 Crore to Upgrade Kasturba Schools
