The appellate tribunal rejected the corporate guarantor's challenge to admission of a Section 7 application. It held that the earlier guarantee deeds remained operative because subsequent sanction letters expressly continued existing securities; the later guarantee did not novate or extinguish prior guarantee obligations, and invocation validly triggered liability, resulting in rejection of the novation defence. It further held that a consortium member could independently initiate Section 7 proceedings upon the borrower's account becoming NPA, so maintainability was upheld. Objections on insufficient stamping were treated as curable and belated, especially where stamp duty exemptions/undertakings existed, and could not defeat undisputed debt and default; the admission order was affirmed and the appeal dismissed - NCLAT
The appellate tribunal rejected the corporate guarantor's challenge to admission of a Section 7 application. It held that the earlier guarantee deeds remained operative because subsequent sanction letters expressly continued existing securities; the later guarantee did not novate or extinguish prior guarantee obligations, and invocation validly triggered liability, resulting in rejection of the novation defence. It further held that a consortium member could independently initiate Section 7 proceedings upon the borrower's account becoming NPA, so maintainability was upheld. Objections on insufficient stamping were treated as curable and belated, especially where stamp duty exemptions/undertakings existed, and could not defeat undisputed debt and default; the admission order was affirmed and the appeal dismissed - NCLAT
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
TaxTMI 
of 4817 
Join Channel 
