NCLT Mumbai Rejects State Bank of India’s Insolvency Petition Against Patanjali Foods Personal Guarantor
The National Company Law Tribunal, Mumbai Bench, dismissed the insolvency petition filed by State Bank of India (“SBI”) against Dinesh Shahra (“Personal Guarantor”), the personal guarantor of Patanjali Foods Ltd., formerly known as Ruchi Soya Industries Ltd. (“Corporate Debtor”), in connection with a debt of Rs. 1,759 crore (the “Petition”). A coram comprising Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar held that the Petition was not maintainable, having been filed after the expiry of the applicable limitation period.
The Tribunal held that the limitation period expired on February 26, 2023, rendering the Petition filed on March 21, 2023 barred by time. The Tribunal further held that the provision for condonation of delay does not apply where the limitation period is governed by the Schedule to the Limitation Act. It also held that the earlier condonation order dated October 18, 2023 was based on a mistaken application of the Supreme Court’s COVID-19 limitation relaxation, as 362 days remained available from March 1, 2022, and the additional 90-day benefit was therefore not available to SBI. While the Tribunal noted that the Rs. 854.04 crore received by SBI under the approved resolution plan of the Patanjali Group was required to be accounted for in determining the subsisting guarantee liability, it held that such receipt did not by itself extinguish the Personal Guarantor’s liability under the guarantee. The pendency of SBI’s proceedings before the Debts Recovery Tribunal was also held to be insufficient to establish discharge of the guarantee in the absence of a final adjudication.
SBI had sanctioned credit facilities to Ruchi Soya from 2013 onwards, with Dinesh Shahra executing various deeds of guarantee. The guarantees were invoked on March 7, 2018, with default occurring on March 12, 2018. Following approval of the Patanjali Group’s resolution plan on July 24, 2019, SBI received Rs. 854.04 crore under the plan. SBI issued a demand notice to the Personal Guarantor on May 26, 2022 and subsequently filed the Petition. The Personal Guarantor challenged the condonation order before the National Company Law Appellate Tribunal, but withdrew that challenge on August 17, 2026, with liberty to raise the limitation issue before the NCLT. The Tribunal, noting that the NCLAT’s order had left the issue open, proceeded to determine the question of limitation and dismissed the Petition accordingly.
The Applicant, State Bank of India, was represented by Advocate Samuel Abraham. The Resolution Professional was represented by Advocate Nausher Kohli. The Personal Guarantor was represented by Advocate Jay Zaveri. The matter is reported as 2026 LLBiz NCLT (MUM) 928, Case No. C.P. (IB) No. 385/MB/2023, in the matter of State Bank of India versus Mr. Dinesh Shahra.
