Personal guarantor insolvency moratorium requires a filed application, allowing SARFAESI enforcement despite the corporate debtor's CIRP.

A Rule 7(1) demand notice to a personal guarantor does not constitute a creditor application under section 95(1) of the IBC and therefore does not trigger the interim moratorium under section 96(1). The note distinguishes the corporate debtor's CIRP moratorium from the moratorium applicable to personal guarantors, stating that SARFAESI possession, auction and sale measures may continue where no insolvency application against guarantors is filed. It also states that completed sales under the 2002 Rules remain unaffected by the corporate debtor's CIRP, and treats the alternative-remedy objection as academic where related DRAT proceedings were already pending.

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Issues: (i) Whether SARFAESI enforcement against personal guarantors could continue after issuance of a demand notice under Rule 7(1) of the 2019 Rules, when no insolvency application had been filed against them under section 95(1) of the IBC; (ii) Whether the Bank's writ petition was maintainable despite the statutory appellate remedy before the DRAT.

Issue (i): Whether SARFAESI enforcement against personal guarantors could continue after issuance of a demand notice under Rule 7(1) of the 2019 Rules, when no insolvency application had been filed against them under section 95(1) of the IBC.

Analysis: A demand notice under Rule 7(1) does not amount to an application by a creditor under section 95(1) of the IBC. The interim moratorium under section 96(1) arises only upon filing of such application before the NCLT. The moratorium applicable to the corporate debtor under section 14 is distinct from the interim moratorium applicable to individuals and personal guarantors. Since no insolvency process was initiated against the guarantors, the pending CIRP against the corporate debtor neither barred SARFAESI measures against the guarantors nor attracted the consolidation mechanism under section 60. The confirmed auction and sale certificate, completed under the safeguards in Rules 8 and 9 of the 2002 Rules, could not be invalidated on the erroneous premise that parallel proceedings were pending against the guarantors.

Conclusion: SARFAESI possession, auction and sale proceedings against the personal guarantors were valid; the setting aside of those measures and the consequential directions in favour of the guarantors were unsustainable.

Issue (ii): Whether the Bank's writ petition was maintainable despite the statutory appellate remedy before the DRAT.

Analysis: The question of alternative remedy was academic because the auction purchaser had already pursued the DRT order before the DRAT, and both writ petitions concerning the same parties and issues were heard together.

Conclusion: The Bank's writ petition was maintainable.

Final Conclusion: The secured creditor retained its entitlement to enforce the security interest against the guarantors, and the auction purchaser's confirmed title was not displaced on account of the corporate debtor's CIRP.

Ratio Decidendi: Issuance of a demand notice to a personal guarantor does not trigger the interim moratorium under the IBC; absent an application under section 95(1), SARFAESI enforcement against the guarantor may proceed notwithstanding CIRP and moratorium against the corporate debtor.

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