Personal Guarantor Held Liable as Rs. 28.5 Crore Demand Notice Effectively Invokes Guarantee Under Section 13(2) SARFAESI Act

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....NCLAT held that a Section 13(2) SARFAESI Act notice constituting a clear demand for Rs. 28,56,64,336.06/- against a personal guarantor effectively invokes the guarantee agreement. The tribunal determined that when a demand notice requests the guarantor to discharge liabilities within a specified timeframe, the personal guarantee stands legally invoked. The court rejected the lower adjudicating authority's finding that the application was premature, emphasizing that the notice's words and intent are critical in determining guarantee invocation. Consequently, the appeal was allowed, setting aside the earlier order rejecting the Section 94(1) application and recognizing the validity of the bank's demand notice as a legitimate cause of action for initiating insolvency proceedings.....