Unilateral Revocation of Guarantee does not Discharge Guarantor from his Obligations in absence of Acceptance by Creditor: NCLAT rules in favour of SBI

The NCLAT (National Company Law Appellate Tribunal) ruled that the unilateral revocation of a guarantee does not discharge the guarantor from his obligations unless the creditor accepts the revocation. This ruling came in favor of the State Bank of India (SBI), which had provided a guarantee for a borrower. The court held that the creditor’s consent is necessary for the revocation of a guarantee to be effective. This decision reinforces the principle that the obligations of a guarantor remain intact until the creditor formally accepts the revocation, providing clarity in cases involving guarantees and their enforceability.