NCLT Mumbai Validates SARFAESI Notice as Personal Guarantee Invocation

The National Company Law Tribunal (NCLT), Mumbai bench, has ruled that a notice issued under the SARFAESI Act can operate as a valid invocation of a personal guarantee when it makes a direct repayment demand on the guarantor.

They clarified that a separate demand notice isn't required beyond a SARFAESI communication, thereby streamlining the process for lenders to proceed against individual guarantors in debt recovery cases.

The tribunal relied on the arbitral award and cited the Supreme Court's ruling in Dena Bank v. C. Shivakumar Reddy, which held that an unsatisfied judgment, decree, or award creates a fresh financial debt enabling insolvency proceedings.

[Solapur Janata Sahakari Bank Limited v. Mukund Pandharinath Kulkarni]