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The Tribunal clarified that whether a SARFAESI notice amounts to invocation of a personal guarantee depends entirely on the contractual terms governing the guarantee and the language of the demand notice. Courts must examine the substance of the communication rather than its form or the designation assigned to the guarantor.
“…the provisions of Section 99 of the Insolvency and Bankruptcy Code, 2016, are procedural and are only for the purposes of recommending for approval or rejection of the application, where the recommendation would have to be based upon the facts and evidence presented to the Resolution Professional or collected by him under the powers conferred upon him to call for records and evidence.”
NCLT examined whether a statutory Form B notice under R. 7(2) of the 2019 Rules, without a distinct contractual demand, can give rise to liability under an on-demand guarantee.
The appellant relying on Tottempudi Salalith v. State Bank of India, (2024) 1 SCC 24, contended that the limitation for filing Section 95 IBC application in the present case must be treated as 12 years and hence the application filed was not barred by time.