Profiteering in construction services for failure to pass input tax credit resulted in repayment exceeding the commensurate benefit and closure of pro...
NCLAT addressed whether a demand notice in Form B under Rule 7(1) of the Personal Guarantor Rules, 2019, can itself constitute invocation of a guarantee for purposes of filing under Section 95 of the Code. The Tribunal held that a guarantor is a debtor who is a personal guarantor to the corporate debtor and that the financial creditor must invoke the guarantee prior to issuing a Form B demand; a pre-existing default by the guarantor must exist at the time of that notice. Absence of prior invocation meant no default and the adjudicating authority's admission was set aside.
NCLAT addressed whether a demand notice in Form B under Rule 7(1) of the Personal Guarantor Rules, 2019, can itself constitute invocation of a guarantee for purposes of filing under Section 95 of the Code. The Tribunal held that a guarantor is a debtor who is a personal guarantor to the corporate debtor and that the financial creditor must invoke the guarantee prior to issuing a Form B demand; a pre-existing default by the guarantor must exist at the time of that notice. Absence of prior invocation meant no default and the adjudicating authority's admission was set aside.
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