# The Canara Bank Limited vs. R S Builders Private Limited

> NCLT judgment dated 2026-08-20. Citation: TCN-2026-NCLT-01018. Canara Bank, as a Financial Creditor, filed a Section 7 IBC application against R.S. Builders…

- **Court:** NCLT
- **Order date:** 20 Aug 2026
- **Citation:** TCN-2026-NCLT-01018
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-mumbai/the-canara-bank-limited-vs-r-s-builders-private-limited-8kzul

## Summary

### Background

Canara Bank, as a Financial Creditor, filed a Section 7 IBC application against R.S. Builders Private Limited, acting as a Corporate Guarantor for M/s Frost International Ltd. (Principal Borrower). The Principal Borrower's account was declared NPA on 17.07.2018. Canara Bank issued a recall notice on 01.09.2018, which the Tribunal later identified as the first invocation of the guarantee. A subsequent invocation notice was issued on 20.01.2025. The Corporate Debtor contested the petition, arguing it was time-barred, asserting that the 01.09.2018 notice was the actual invocation and that any subsequent acknowledgments by the Principal Borrower's Resolution Professional did not extend limitation against the guarantor.

## Facts

Canara Bank (Financial Creditor) filed C.P. (IB) No. 943 of 2025 under Section 7 of IBC against R.S. Builders Private Limited (Corporate Debtor).

The Corporate Debtor is a Corporate Guarantor for credit facilities availed by M/s Frost International Ltd. (Principal Borrower).

The application was affirmed by Mrs. Dolly Ahirwar, Manager of Canara Bank SAM Branch, Mumbai.

The amount claimed in default is Rs. 7,42,06,10,813.68/- as on 31.03.2025, with the date of default stated as 29.01.2025.

Mr. Anand Sonbhadra was proposed as the Interim Resolution Professional.

The Principal Borrower's account was classified as NPA on 17.07.2018.

A recall notice dated 01.09.2018 was sent to the Principal Borrower and the Corporate Debtor.

…

## Issues and analysis

### Issue 1: Whether the guarantee was …

**Ratio:** A notice demanding payment from the Corporate Debtor, who is a guarantor, constitutes an

…

**Reasoning:** The Tribunal perused the notice dated 01.09.2018, which was addressed to the Corporate

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**Interpretation:** The term 'recall notice' when addressed to a guarantor and demanding payment,

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**Application:** The notice dated 01.09.2018, despite being termed a 'recall notice' by the

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## Parties

- **Judges:** SAMEER…; NILESH S…
- **Appellants:** The Canara Bank…
- **Respondents:** R. S. BUILDERS…
- **Other parties:** Anand Son…
- **Advocates:** Roshan…; Malhar Za…; +4 more

## Timeline

- **1989-02-22 — Incorporation of…**: R.S. BUILDERS NIRMAN PRIVATE LIMITED…
- **2014-01-07 — Sanction…**: Copy of Sanction letter…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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