Forgery Allegations Cannot Discharge Earlier Continuing Guarantee: NCLAT

This article explains an NCLAT ruling that allegations of forgery in subsequent guarantee documents cannot invalidate an earlier continuing guarantee. It discusses the legal distinction between primary and continuing guarantees and how liabilities under validly executed guarantees remain enforceable despite disputes over later documents. The piece outlines the facts involving SBI’s insolvency petition, the defence raised by the guarantor, and the tribunal’s interpretation of contract and insolvency law principles. It further highlights the implications for banks and financial institutions in enforcing security and guarantee arrangements.