Corporate Guarantor Can't Be Absolved From Its Liability Only Due To Non-Invocation Of Guarantee: NCLAT Delhi

In a recent decision, the NCLAT held that a corporate guarantor cannot be held liable under the Insolvency and Bankruptcy Code (IBC) if the guarantee itself was not invoked. The case involved disputes over the invocation of a bank guarantee by creditors against a defaulting borrower. The tribunal emphasized that liability arises only when the guarantee is actually invoked, protecting corporate guarantors from automatic liability under the IBC. This ruling clarifies the extent of corporate guarantor obligations and reinforces procedural safeguards in financial transactions.