Insolvency and Bankruptcy Code, 2016: s. 7 - Initiation of corporate insolvency resolution process by financial creditor – Application for initiating CIRP by Financial Creditor-Bank u/s. 7 against a corporate person (being a corporate debtor) concerning guarantee offered by it in respect of a loan account of the principal borrower, who had committed default and is not a “corporate person” within the meaning of the Code – Maintainability of – Held: Right or cause of action would enure to the lender (financial creditor) to proceed against the principal borrower, as well as the guarantor in equal measure in case they commit default in repayment of the amount of debt acting jointly and severally – It would still be a case of default committed by the guarantor itself, if and when the principal borrower fails to discharge his obligation in respect of amount of debt – For, the obligation of the guarantor is co-extensive and co-terminous with that of the principal borrower to defray the debt, as predicated in s. 128 of the Contract Act – As a consequence of such default, the status of the guarantor metamorphoses into a debtor or a corporate debtor if it happens to be a corporate person, within the meaning of s. 3(8) of the Code – Principal borrower may or may not be a corporate person, but if a corporate person extends guarantee for the loan transaction concerning a principal borrower not being a corporate person, it would still be covered within the meaning of expression “corporate debtor” in s. 3(8) of the Code – Upon default committed by the principal borrower, the liability of the company (corporate person), being the guarantor, instantly triggers the right of the financial creditor to proceed against the corporate person (being a corporate debtor) – Thus, action u/s. 7 of the Code could be legitimately invoked even against a (corporate) guarantor being a corporate debtor. s. 7 - Application under – For initiation of corporate insolvency resolution process by financial creditor-Bank against corporate debtor concerning guarantee offered by it in respect of a loan account of the principal borrower, who committed default – Application filed after three years from the date of declaration of the loan account as Non-performing Asset, being the date of default, if barred by limitation – Held: When the principal borrower and/or the (corporate) guarantor admit and acknowledge their liability after declaration of NPA but before the expiration of three years therefrom including the fresh period of limitation due to (successive) acknowledgments, it is not possible to extricate them from the renewed limitation accruing due to the effect of Section 18 of the Limitation Act – s. 18 would come into play every time when the principal borrower and/or the corporate guarantor-corporate debtor, as the case may be, acknowledge their liability to pay the debt – Such acknowledgment must be before the expiration of the prescribed period of limitation including the fresh period of limitation due to acknowledgment of the debt, from time to time, for institution of the proceedings u/s. 7 of the Code – On facts, NCLT as well as NCLAT adverted to the acknowledgments by the principal borrower as well as the corporate guarantor-debtor after declaration of NPA time and again after 30.01.2010 and lastly on 08.12.2018 – View taken by the NCLT and NCLAT that a fresh period of limitation is required to be computed from the date of acknowledgment of debt by the principal borrower from time to time and in particular the (corporate) guarantor/corporate debtor vide last communication dated 08.12.2018, is affirmed – Thus, the application u/s. 7 of the Code filed on 13.02.2019 is within limitation – Limitation Act, 1963 - s. 18.