Insolvency application against Personal Guarantor not enforceable

The Guwahati Bench of the National Company Law Tribunal (NCLT) has rejected an insolvency application filed against a personal guarantor under Section 95 of the Insolvency and Bankruptcy Code, 2016, holding that the creditor failed to establish valid invocation of the guarantee, existence of a legally enforceable default and compliance with limitation requirements. 

The Tribunal clarified that a demand notice issued under Rule 7(1) of the Personal Guarantor Rules cannot substitute a contractual invocation of the guarantee and that insolvency proceedings against personal guarantors must satisfy strict statutory requirements before admission.