INDUSTRIAL INVESTMENT BANK OF INDIA LTD. vs BISHWANATH JHUNJHUNWALA

The Supreme Court held that under Section 40 of the Industrial Reconstruction Bank of India Act, 1984, the appellant could not seek relief against the guarantor in the absence of a direct application against them. The Court established that a personal guarantee remains enforceable despite the borrower company's defaults, and the guarantor can be held liable for the debts incurred. The appeal was dismissed, affirming the High Court's decision that the respondent, as a guarantor, was not a necessary party in the proceedings initiated under the IRBI Act.