https://www.taxtmi.com/caselaws?id=450509 The NCLAT Principal Bench dismissed an appeal challenging admission of a Section 7 application filed by a financial creditor against a corporate guarantor. The appellant argued the guarantee was invoked only by a notice dated 12.02.2021, which fell within the Section 10A moratorium period, making the application barred. However, the NCLAT held that an earlier recall notice dated 22.02.2020 addressed to both borrower and guarantors constituted valid invocation of the guarantee, clearly stating that failure to pay within seven days would result in SARFAESI and IBC proceedings. Since the guarantee was invoked before the Section 10A period through the 22.02.2020 notice, the financial creditor was entitled to initiate Section 7 proceedings against both principal borrower and guarantors. The appeal was dismissed and the AA's order admitting the application was upheld. en-us Tue, 05 Mar 2024 00:00:00 +0530 Thu, 07 Mar 2024 09:07:50 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=450509 The NCLAT Principal Bench dismissed an appeal challenging admission of a Section 7 application filed by a financial creditor against a corporate guarantor. The appellant argued the guarantee was invoked only by a notice dated 12.02.2021, which fell within the Section 10A moratorium period, making the application barred. However, the NCLAT held that an earlier recall notice dated 22.02.2020 addressed to both borrower and guarantors constituted valid invocation of the guarantee, clearly stating that failure to pay within seven days would result in SARFAESI and IBC proceedings. Since the guarantee was invoked before the Section 10A period through the 22.02.2020 notice, the financial creditor was entitled to initiate Section 7 proceedings against both principal borrower and guarantors. The appeal was dismissed and the AA's order admitting the application was upheld. Case-Laws Insolvency and Bankruptcy Tue, 05 Mar 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=450509