Demand Notice Issued U/S 13(2) Of SARFAESI Act Without Obligating Guarantor To Make Payment Is Not An Invocation Of Guarantee: NCLT Mumbai

The NCLT Mumbai held that a demand notice issued under Section 13(2) of the SARFAESI Act, without obligating the guarantor to make payment, cannot be considered an invocation of guarantee. This ruling clarifies the requirements for invoking guarantees under the SARFAESI Act. It emphasizes that demand notices must explicitly require payment from the guarantor. The decision protects guarantors from premature claims. It underscores the importance of precise language in legal notices. This order provides clarity on the procedural aspects of invoking guarantees.