When Guarantee requires invocation of the guarantee deed, default on the Guarantor shall be the date when Guarantee has been invoked, date of default on the part of Principal Borrower cannot be put for Corporate Guarantor – Mudhit Madanlal Gupta Vs. Supreme Constructions and Developers Pvt. Ltd. – NCLAT New Delhi

In this important judgment, NCLAT held that:
(i) When the Financial Creditor has invoked the corporate guarantee of the corporate guarantor by the notice dated 16.10.2020 and asked the corporate guarantor to make the payment within seven days from the receipt of the notice, the default has occurred during the 10A period and the default dated 02.07.2019 which is default alleged against the Principal Borrower can not be put to a default for corporate guarantor.
(ii) Liability of corporate guarantor although is coextensive of the Principal Borrower but when the Guarantee requires invocation of the guarantee deed, default on the guarantor shall be the date when corporate guarantee has been invoked.

When Guarantee requires invocation of the guarantee deed, default on the Guarantor shall be the date when Guarantee has been invoked, date of default on the part of Principal Borrower cannot be put for Corporate Guarantor – Mudhit Madanlal Gupta Vs. Supreme Constructions and Developers Pvt. Ltd. – NCLAT New Delhi Read Post »