Notices Sent to Guarantor’s Last Known Address as per Guarantee Deed Were Held Valid & Couldn’t Be Invalidated Due to Non-Receipt | NCLAT

Case Details: Paresh Rastogi v. Omkara Assets Reconstruction (P.) Ltd. - [2025] 173 taxmann.com 84 (NCLAT-New Delhi)

Judiciary and Counsel Details

• Justice Ashok Bhushan, Chairperson, Barun Mitra & Arun Baroka, Technical Members
• Sumesh Dhawan, Ms Swastika Kumari & Sagar Thhakar, Advs. for the Appellant.
• Satendra Rai, Pareesh Virmani, Vishal Ganda, Ms Charmi Khurana, Anshit Aggarwal & Umesh Gupta, Advs. for the Respondent.

Facts of the Case

In the instant case, the corporate debtor had taken a loan from the financial creditor, which was secured by way of irrevocable personal guarantees. The appellant/personal guarantor had executed a Guarantee Deed in favour of the financial creditor. However, the corporate debtor, along with the co-borrower, had committed default in repaying the loan.

The financial creditor had issued a Loan Recall Notice, Invocation Notice and Demand Notice to the last known address of the appellant as per the terms of the Guarantee Deed. Thereafter, the financial creditor filed an application under section 95 of the IBC to initiate the Insolvency Resolution Process against the appellant.

The Adjudicating Authority admitted the said application. Thereafter, the appellant filed an appeal contending that the Recall Notice, Invocation Notice and Demand Notice were not delivered to the appellant.

It was noted that the appellant had agreed to a clause in the Guarantee Deed that all communications, including a Notice of Demand sent to the last known address, would be considered sufficient service.

It was noted that since the appellant had not updated its address with the financial creditor, the same address remained the last known address. Further, since the financial creditor had sent a Recall Notice, Invocation Notice and Demand Notice to the last known address as per the Guarantee Deed, service of the said notices was valid and could not be invalidated on the ground that the appellant had not received the same.

NCLAT Held

The NCLAT held that the appellant’s failure to update its address could not be used to invalidate such service. Thus, there was no infirmity in the impugned order passed by the Adjudicating Authority.

List of Cases Reviewed

• Order of (NCLT- New Delhi) in CP (IB) No. 655 (ND)/2022, dated September 19, 2024 [2025] 173 taxmann.com 34 (para 69) affirmed.
• Edelweiss Asset Reconstruction Company v. Orissa Manganese and Minerals Limited and others (para 63) distinguished.
• Supreme Court of India- CC Alavi Haji v. Palapetty Muhammed, Greater Mohali Area Development Authority and Ors. v. Manju Jain and Ors. (2010) 9 SCC 157
• St. Alfred Education Trust v. Kone Elevator India Pvt. Ltd.
• Alavi Haji v. Palapetty Muhammed
• jay Ahuja v. Subhiksha Trading Services Ltd., [reported at 2011 (121) DRJ 137]
• Jharkhand in Milan Poddar v. CIT, reported at (2013) 357 ITR 619 (para 51)
• Mohan Kumar Garg v. Omkara Assets Reconstruction Pvt. Ltd. & Anr (para 65) followed.

List of Cases Referred to

• St. Alfred Education Trust v. Kone Elevator India Pvt. Ltd. MANU/TN/7775/2023 (para 19)
• Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555 (para 19)
• Lalit Kumar Jain v. Union of India (2021) 9 SCC 321 (para 23)
• Greater Mohali Area Development Authority and Ors. v. Manju Jain and Ors. (2010) 9 SCC 157 (para 46)
• Milan Poddar v. CIT [2012] 24 taxmann.com 27/211 Taxman 403/[2013] 357 ITR 619 (Jharkhand) (para 49).