New Delhi, May 30 -- The National Company Law Appellate Tribunal (NCLAT) Delhi, in Company Appeal (AT) (Insolvency) No. 84 of 2025, has ruled that a notice issued under Section 13(2) of the SARFAESI Act to a personal guarantor constitutes a valid invocation of the personal guarantee, thereby giving rise to a cause of action under Section 94(1) of the Insolvency and Bankruptcy Code (IBC).

This judgment overturns the NCLT's dismissal of the personal guarantor's insolvency application on grounds of prematurity, affirming that a valid invocation had already taken place through the Section 13(2) notice dated 09.10.2023.

The case originated when M/s Surana Metacast (India) Private Limited, the principal borrower, defaulted on a loan taken fro...