Insolvency And Bankruptcy Code: Section 14 Moratorium Would Not Apply To A Personal Guarantor Of A Corporate Debtor: SC [Read Judgment]
6 years, 7 months ago

Insolvency And Bankruptcy Code: Section 14 Moratorium Would Not Apply To A Personal Guarantor Of A Corporate Debtor: SC [Read Judgment]

Live Law  

'Section 14 refers only to debts due by corporate debtors, who are limited liability companies, and it is clear that in the vast majority of cases, personal guarantees are given by Directors who are in management of the companies. The Supreme Court has held that Section 14 of the Insolvency and Bankruptcy Code, 2016, which provides for a moratorium for the limited period mentioned in the Code, on admission of an insolvency petition, would not apply to a personal guarantor of a corporate debtor. National Company Law Tribunal allowed his plea observing that, since under Section 31 of the Code, a Resolution Plan made thereunder would bind the personal guarantor as well, and since, after the creditor is proceeded against, the guarantor stands in the shoes of the creditor, Section 14 would apply in favour of the personal guarantor as well. Section 14 Moratorium Has No Application To Personal Guarantors The bench headed by Justice RF Nariman extensively referred to provisions of the Code and observed that a plain reading of Section 14 of the codes leads to the conclusion that the moratorium referred to in Section 14 can have no manner of application to personal guarantors of a corporate debtor. Disagreeing with the views of NCLT and NCLAT, the bench observed: "Section 60 of the Code, in sub-section thereof, refers to insolvency resolution and liquidation for both corporate debtors and personal guarantors, the Adjudicating Authority for which shall be the National Company Law Tribunal, having territorial jurisdiction over the place where the registered office of the corporate person is located.

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History of this topic

Serving Demand Notice To Personal Guarantor Under Rule 7 Of Personal Guarantors Rules Cannot Be Considered Invocation Of Guarantee: NCLAT
3 weeks, 6 days ago

Serving Demand Notice To Personal Guarantor Under Rule 7 Of Personal Guarantors Rules Cannot Be Considered Invocation Of Guarantee: NCLAT

Live Law  

The National Company Law Appellate Tribunal New Delhi bench of Justice Ashok Bhushan, Mr. Barun Mitra and Mr. Arun Baroka has held that a Notice served to the personal guarantor under Rule 7 of Insolvency and Bankruptcy Rules, 2019 cannot be considered 'Invocation of Guarantee', therefore unless a guarantee has been invoked as per the terms of the 'Deed of …

Supreme Court Disapproves Of High Court Interdicting Insolvency Process Against Personal Guarantor At Threshold Stage In Writ Jurisdiction
1 month, 1 week ago

Supreme Court Disapproves Of High Court Interdicting Insolvency Process Against Personal Guarantor At Threshold Stage In Writ Jurisdiction

Live Law  

The Supreme Court while deciding an appeal pertaining to insolvency proceedings initiated against a personal guarantor, observed that the High Court should not have prohibited such proceedings by holding that the guarantor's liability has been waived. "In light of this statutory scheme, which has been followed by the Adjudicating Authority, we are of the view that the High Court incorrectly …

Moratorium During Insolvency Process Does Not Bar Cheque Dishonour Proceedings Against Persons Referred U/S 141 Of NI Act: Kerala High Court
1 month, 2 weeks ago

Moratorium During Insolvency Process Does Not Bar Cheque Dishonour Proceedings Against Persons Referred U/S 141 Of NI Act: Kerala High Court

Live Law  

The Kerala High Court yesterday, observed that during the Corporate Insolvency Resolution Process, initiation of cheque dishonour proceedings, due to the moratorium, is prohibited only against the corporate debtor and not against the persons referred under Section 141 of the Negotiable Instruments Act. “ When the Corporate Insolvency Resolution Process of the company is underway, the corporate debtor would be …

Insolvency Application Against Personal Guarantor Is Maintainable U/S 60(1) Of IBC Even If No CIRP Process Is Pending Against CD: NCLAT
2 months ago

Insolvency Application Against Personal Guarantor Is Maintainable U/S 60(1) Of IBC Even If No CIRP Process Is Pending Against CD: NCLAT

Live Law  

The NCLAT New Delhi bench of Justice Ashok Bhushan and Mr. Arun Baroka has held that an application under section 95 of the Insolvency and Bankruptcy Code against the personal guarantor is maintainable before the NCLT under section 60 of the code even if no CIRP or Liquidation process is initiated or pending against the corporate debtor before the NCLT. …

Unilateral Revocation Of Guarantee Does Not Discharge Guarantor From His Obligations When Such Revocation Was Not Accepted By Creditor: NCLAT
2 months, 2 weeks ago

Unilateral Revocation Of Guarantee Does Not Discharge Guarantor From His Obligations When Such Revocation Was Not Accepted By Creditor: NCLAT

Live Law  

The NCLAT New Delhi bench of Justice Rakesh Kumar Jain, Mr. Naresh Salecha and Mr. Indevar Pandey has held that unilateral revocation of guarantee by the Respondent No.1 does not absolve him from his obligations under the guarantee agreement when the Financial Creditor has not agreed to such revocation. It was also argued that approval of Resolution Plan does not …

IBC | Moratorium Does Not Extinguish Claim : Supreme Court
3 months, 1 week ago

IBC | Moratorium Does Not Extinguish Claim : Supreme Court

Live Law  

The Supreme Court has held that a moratorium declared under Section 14 of the Insolvency and Bankruptcy Code, 2016 will not extinguish a claim. The Court stated that Section 14 bars the institution/continuation of legal proceedings against the corporate debtor, transfer of assets, enforcement of security interest etc. "If the argument that the claims of all the creditors of the …

Date Of Default In Case Of Personal Guarantor Depends On Terms Of Contract Of Guarantee: NCLAT
3 months, 1 week ago

Date Of Default In Case Of Personal Guarantor Depends On Terms Of Contract Of Guarantee: NCLAT

Live Law  

The NCLAT New Delhi bench of Justice Ashok Bhushan, Mr. Arun Baroka and Barun Mitra has held that the liability of a borrower and guarantor is co-extensive but the liability of a Guarantor stems from the contract of guarantee and therefore the date of default in the case of the guarantor depends on the terms of contract of guarantee. Since …

Limitation Period For Both Corporate Debtor And Personal Guarantor Will Commence From Same Date: NCLT Hyderabad
3 months, 3 weeks ago

Limitation Period For Both Corporate Debtor And Personal Guarantor Will Commence From Same Date: NCLT Hyderabad

Live Law  

The NCLT Hyderabad bench of Sri Rajeev Bhardwaj and Sri Sanjay Puri has held that the Personal Guarantor should be treated on an equal legal footing with the Corporate Debtor, as it is clearly established by the law that the liability of Corporate Debtor and Personal Guarantor are co-extensive in nature. The petitioner submitted that the Guarantee Agreement is a …

Pre-CIRP Dues Cannot Be Recovered After Admission Of Corporate Debtor Into Insolvency: NCLAT
3 months, 3 weeks ago

Pre-CIRP Dues Cannot Be Recovered After Admission Of Corporate Debtor Into Insolvency: NCLAT

Live Law  

The NCLAT Chennai bench of Justice Rakesh Kumar Jain and Mr. Ajai Das Mehrotra has held that pre-CIRP dues cannot be recovered once the corporate debtor is admitted into insolvency due to moratorium under section 14 of the code. 108.44 Crores was deposited by the Corporate Debtor as payment security mechanism and the same is for transmission charges dues payable …

Guarantor Cannot Become Financial Creditor Without Making Any Payment In Discharge Of Guarantee: NCLAT
4 months ago

Guarantor Cannot Become Financial Creditor Without Making Any Payment In Discharge Of Guarantee: NCLAT

Live Law  

The NCLAT New Delhi bench of Mr. Justice Ashok Bhushan, Mr. Barun Mitra and Mr. Arun Baroka has held that guarantor cannot become a financial creditor without paying any amount towards discharging the liability of the principal borrower for whom the guarantee was given. The IRP sent a report in which two more unsecured financial creditors, the appellants herein, were …

Threshold Limit For Initiating Insolvency Process Against Personal Guarantors Is Also ₹1 Crore: NCLT New Delhi
4 months ago

Threshold Limit For Initiating Insolvency Process Against Personal Guarantors Is Also ₹1 Crore: NCLT New Delhi

Live Law  

The NCLT New Delhi bench of Shri Subrata Kumar Dash and Shri Ashok Kumar Bhardwaj had held that the threshold limit for initiating insolvency process against the personal guarantors under section 95 of the Code would be the same as is with respect to the corporate debtor under section 4 of the IBC i.e. The tribunal further noted that it …

Sale Of Corporate Debtor As Going Concern Under Liquidation Regulations Takes Precedence Over Scheme Of Compromise U/S 230: NCLAT
4 months, 1 week ago

Sale Of Corporate Debtor As Going Concern Under Liquidation Regulations Takes Precedence Over Scheme Of Compromise U/S 230: NCLAT

Live Law  

The NCLAT Chennai bench of Justice Sharad Kumar Sharma and Jatindranath Swain affirmed that the sale of the Corporate Debtor as a going concern under Regulations 32 & 32A of the Liquidation Regulations is more transparent and effective; therefore, the sale of the Corporate Debtor as a going concern will have precedence, rather than resorting to the Scheme of Compromise …

Adjudicating Authority Cannot Enter Into Merits At S. 95 Application Stage Before Report Of RP Is Submitted U/S 99 Of IBC: NCLAT
4 months, 2 weeks ago

Adjudicating Authority Cannot Enter Into Merits At S. 95 Application Stage Before Report Of RP Is Submitted U/S 99 Of IBC: NCLAT

Live Law  

The NLCAT New Delhi bench of Justice Ashok Bhushan, Barun Mitra and Arun Baroka affirmed that Adjudicating Authority cannot exercise its adjudicatory power at the stage of consideration of application under section 95 of the IBC by entering into the merits of the case. Brief Facts This Appeal by the Financial Creditor has been filed challenging order dated 21.02.2024 passed …

Weekly Digest Of IBC Cases: 22nd July 2024 To 28th July 2024
7 months, 4 weeks ago

Weekly Digest Of IBC Cases: 22nd July 2024 To 28th July 2024

Live Law  

Supreme Court IBC | CIRP Of Holding Company Cannot Include Subsidiary's Assets: Supreme Court Case no. Insolvency Resolution Of Corporate Guarantor Won't Bar Creditor From Filing CIRP Against Corporate Debtor For Balance Debt : Supreme Court Case Title: BRS Ventures Investments Ltd. 313 of 2024 The National Company Law Appellate Tribunal, Delhi bench of Justice Ashok Bhushan and Mr Barun …

NCLT Kochi: Creditors Can't Initiate Insolvency Proceedings Against Personal Guarantor Without Establishing Independent Default By CD
9 months ago

NCLT Kochi: Creditors Can't Initiate Insolvency Proceedings Against Personal Guarantor Without Establishing Independent Default By CD

Live Law  

The National Company Law Tribunal Kochi, comprising Justice T Krishna Valli and Mr. Shyam Babu Gautam dismissed the application to initiate insolvency proceedings against the Personal guarantors under Section 95 of Insolvency and Bankruptcy Code, 2016. It held that creditors cannot initiate insolvency proceedings against personal guarantors solely based on the initiation of the Corporate Insolvency Resolution Process without showcasing …

Financial Creditor Can Initiate Simultaneous Or Independent Proceedings Against Principle Borrower And Personal Guarantor: NCLT Mumbai
9 months, 3 weeks ago

Financial Creditor Can Initiate Simultaneous Or Independent Proceedings Against Principle Borrower And Personal Guarantor: NCLT Mumbai

Live Law  

The National Company Law Tribunal, Mumbai Bench-VI bench of K. R. Saji Kumar and Sanjiv Dutt has held that the principal debtor and the surety are jointly and severally liable to the creditor which has the right to recover its dues from either or both of them simultaneously. Observations by the NCLT: The NCLT considered the objection raised by the …

IBC Revolutionizes Corporate Insolvency
11 months, 3 weeks ago

IBC Revolutionizes Corporate Insolvency

Deccan Chronicle  

Exactly, 10 years ago, in the run-up to the 2014 Lok Sabha elections, Narendra Modi, who was the BJP’s prime ministerial candidate, had said that traders have more risk-taking capacity than soldiers. Several hundreds of companies and lakhs of employees have benefitted from a relatively easy resolution process devised by IBC.After seven years of IBC’s journey, corporate litigation and disputes …

IBBI Amends Regulations Regarding Insolvency Professionals w.e.f. 31st January 2024
1 year, 1 month ago

IBBI Amends Regulations Regarding Insolvency Professionals w.e.f. 31st January 2024

Live Law  

The Insolvency and Bankruptcy Board of India has amended the Insolvency and Bankruptcy Board of India Regulations, 2016, with effect from 31.01.2024. Explanation.- The insolvency professional shall continue to discharge his duties, functions and responsibilities till the approval of resignation by the Adjudicating Authority.” The Clause 23B of First Schedule of IP Regulations states that an Insolvency Professional shall not …

NCLT Kolkata: Simultaneous CIRP Can Be Initiated Against Principal Borrower And Corporate Guarantor
1 year, 1 month ago

NCLT Kolkata: Simultaneous CIRP Can Be Initiated Against Principal Borrower And Corporate Guarantor

Live Law  

The National Company Law Tribunal Kolkata comprising Smt. NCLT Verdict: The NCLT Kolkata admitted the CIRP application and held that a simultaneous CIRP can be initiated against Principal Borrower and Corporate Guarantor under IBC. In cases where the corporate person had offered guarantee in respect of loan transaction, the right of the financial creditor to initiate action against such entity …

The SC’s ruling on personal debt guarantees will help unlock dead capital
1 year, 4 months ago

The SC’s ruling on personal debt guarantees will help unlock dead capital

Live Mint  

The adoption of the Insolvency and Bankruptcy Code in 2016 was one of the most important economic reforms of the past 10 years. Various earlier attempts, such as the very old Sick Industrial Companies Act, the SARFAESI law of 2003 and various debt recovery tribunals, had yielded unsatisfactory results. In the first five years of its operation, the value of …

Supreme Court Upholds Constitutionality Of IBC Provisions Relating To Personal Guarantors; Says Adjudicatory Role Can't Be Read Into Sec 97
1 year, 4 months ago

Supreme Court Upholds Constitutionality Of IBC Provisions Relating To Personal Guarantors; Says Adjudicatory Role Can't Be Read Into Sec 97

Live Law  

In a significant judgment, the Supreme Court on Thursday upheld the constitutionality of the provisions of the Insolvency and Bankruptcy Code relating to Personal Guarantors' Insolvency Resolution, which were introduced through the amendments made in 2019.The Court held that these provisions cannot be held as unconstitutional for not affording. In a significant judgment, the Supreme Court on Thursday upheld the …

NCLT Kochi: Moratorium U/S 96 And 101 Of IBC Cannot Be Meant To Prohibit The Right To Action U/S 7, 9 Or 10 Of IBC
1 year, 4 months ago

NCLT Kochi: Moratorium U/S 96 And 101 Of IBC Cannot Be Meant To Prohibit The Right To Action U/S 7, 9 Or 10 Of IBC

Live Law  

The National Company Law Tribunal, Kochi Bench, comprising of Justice T Krishna Valli and Shri. Shyam Babu Gautam dismissed a stay application and has held that the moratorium under sections 96 and 101 of the Insolvency and Bankruptcy Code “ cannot be meant to prohibit the right to action under sections 7, 9 or 10 of IBC as it lies …

SC Issues Notice to Centre on Pleas Challenging Provisions of Insolvency and Bankruptcy Code
1 year, 8 months ago

SC Issues Notice to Centre on Pleas Challenging Provisions of Insolvency and Bankruptcy Code

News 18  

The Supreme Court on Monday agreed to hear a batch of petitions challenging various provisions of the Insolvency and Bankruptcy Code over claims that they are violative of fundamental rights like the right to equality of those against whom insolvency proceedings have been initiated. A bench comprising Chief Justice D Y Chandrachud and justices P S Narasimha and Manoj Misra …

A Petition Against A Corporate Guarantor Cannot Be Dismissed Simply Because A Resolution Plan For The Corporate Debtor Is Under Consideration: NCLT Mumbai
1 year, 10 months ago

A Petition Against A Corporate Guarantor Cannot Be Dismissed Simply Because A Resolution Plan For The Corporate Debtor Is Under Consideration: NCLT Mumbai

Live Law  

The National Company Law Tribunal, Mumbai Bench, comprising Shri Kuldip Kumar Kareer and Smt. Edelweiss Asset Reconstruction Company Limited vs Sadguru Multitrade Private Limited has held that insolvency proceedings can be initiated against both the Corporate Debtor and Corporate Guarantor simultaneously and a petition against a Corporate Guarantor cannot be dismissed simple on the ground that a Resolution Plan is …

No Ipso Facto Absolvement Of Guarantor’s Liability Upon Approval Of Resolution Plan: Allahabad High Court
2 years, 2 months ago

No Ipso Facto Absolvement Of Guarantor’s Liability Upon Approval Of Resolution Plan: Allahabad High Court

Live Law  

The High Court of Allahabad Bench comprising of Justice Sunita Agarwal and Justice Vipin Chandra Dixit, while adjudicating a petition filed in Narendra Singh Panwar v Pashchimanchal Vidyut Vitran Nigam Limited & Ors., has held that approval of a resolution plan under Section 31 of the IBC, does not ipso facto absolve the surety/guarantor of the Corporate Debtor of his …

Demystifying The Effect Of Insolvency Proceedings In India On Arbitrations
2 years, 6 months ago

Demystifying The Effect Of Insolvency Proceedings In India On Arbitrations

Live Law  

Globalization has been accompanied by cross-border commercial disputes and arbitration has become the default setting for adjudication both nationally and globally. This stage can induce the following situations: - First, when claims are brought against the corporate debtor, a stay on the arbitration proceedings, as per section 14 IBC will apply; Second, when claims are made by the corporate debtor, …

CIRP Can Be Initiated Against Corporate Guarantor Without Proceeding Against Principal Borrower: Supreme Court
2 years, 6 months ago

CIRP Can Be Initiated Against Corporate Guarantor Without Proceeding Against Principal Borrower: Supreme Court

Live Law  

The Supreme Court held that Corporate Insolvency Resolution Process can be initiated against the Corporate Guarantor without proceeding against the principal borrower.The liability of the guarantor is co-extensive with that of the Principal Borrower, the bench comprising Justices Indira Banerjee and JK Maheshwari observed.In this case, the Adjudicating Authority admitted. The Supreme Court held that Corporate Insolvency Resolution Process can …

Section 10A Is Not Applicable To Proceedings Against Personal Guarantors Under Insolvency & Bankruptcy Code, 2016: NCLAT New Delhi
2 years, 7 months ago

Section 10A Is Not Applicable To Proceedings Against Personal Guarantors Under Insolvency & Bankruptcy Code, 2016: NCLAT New Delhi

Live Law  

The National Company Law Appellate Tribunal, New Delhi bench comprising of Justice Ashok Bhushan and Justice M Satyanarayan Murthy, Mr. Barun Mitra recently held that Section 10A of the Insolvency & Bankruptcy Code, 2016 is not applicable to proceedings against the personal guarantors under Section 95 of the Code. Contentions of Personal Guarantor It was contended on behalf of the …

Reverse Corporate Insolvency Resolution Process In Case Of Real Estate Companies
2 years, 8 months ago

Reverse Corporate Insolvency Resolution Process In Case Of Real Estate Companies

Live Law  

Taking a cue from the Supreme Court in the matter of Swiss Ribbons Private Limited and Anr. However, through the reverse corporate insolvency resolution process, the promoters can overcome the bar given in Section 29A of the Code and give a proposal for completing and delivering the projects of the corporate debtor. The reason given by the NCLAT for propounding …

Corporate Debtor Cannot Be Dragged Into CIRP Mala Fide For Any Purpose Other Than Resolution Of Insolvency: NCLT Mumbai
2 years, 9 months ago

Corporate Debtor Cannot Be Dragged Into CIRP Mala Fide For Any Purpose Other Than Resolution Of Insolvency: NCLT Mumbai

Live Law  

The National Company Law Tribunal, Mumbai Bench, comprising of Justice P. N. Deshmukh and Mr. Kapal Kumar Vohra, while adjudicating an application filed in Gateway Offshore Private Limited and Anr. Ltd., has held that a written contract cannot be treated as a pre- requisite to prove the existence of a financial debt and the Adjudicating Authority must be satisfied that …

Insolvency Law in Review – February & March 2022
2 years, 10 months ago

Insolvency Law in Review – February & March 2022

Live Law  

The enactment of the Insolvency and Bankruptcy Code 2016 has had significant ramifications on the corporate insolvency landscape. In Jet Aircraft Maintenance Engineers Welfare Association v. Shri Ashish Chhawchharia Resolution Professional for Jet Airways Ltd. & Others, the NCLAT, New Delhi held that the provision of moratorium under Section 14 of the Code and the provision of Regulation 29 of …

SARFAESI Proceedings Cannot Be Continued Against Corporate Debtor Once CIRP Is Admitted And Moratorium Is Ordered: Supreme Court
2 years, 10 months ago

SARFAESI Proceedings Cannot Be Continued Against Corporate Debtor Once CIRP Is Admitted And Moratorium Is Ordered: Supreme Court

Live Law  

The Supreme Court observed that the proceedings under the SARFAESI Act cannot be continued once the CIRP is initiated and the moratorium is ordered.The bench comprising Justices L. Nageswara Rao and B R Gavai noted that, in such a situation, any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property …

Supreme Court Issues Notice On Plea Challenging Constitutionality Of IBC Provisions Relating To Personal Guarantors
2 years, 10 months ago

Supreme Court Issues Notice On Plea Challenging Constitutionality Of IBC Provisions Relating To Personal Guarantors

Live Law  

The Supreme Court has issued notice on a petition filed by a personal guarantor which raises a constitutional challenge to the personal insolvency provisions under the Insolvency & Bankruptcy Code, 2016. Since a similar issue is pending, the Court has directed to tag the present case along with the pending Special Leave Petition No. 16464 of 2021 The personal guarantor …

Proceedings Against Personal Guarantor Of Corporate Debtor Can Be Continued Independently - Supreme Court Lifts The Stay
2 years, 10 months ago

Proceedings Against Personal Guarantor Of Corporate Debtor Can Be Continued Independently - Supreme Court Lifts The Stay

Live Law  

Supreme Court bench comprising of Justice S Abdul Nazeer and Justice Vikram Nath vide its order dated 06.05.2021 in the case of Mahendra Kumar Jajodia versus State Bank of India, Civil Appeal No. NCLAT held that even in the absence of any pending Corporate Insolvency Resolution Process or Liquidation proceedings, the application under Section 95 of the Insolvency Bankruptcy Code, …

Insolvency Law In Review – January 2022
2 years, 11 months ago

Insolvency Law In Review – January 2022

Live Law  

The enactment of the Insolvency and Bankruptcy Code 2016 has had significant ramifications on the corporate insolvency landscape. In State Bank of India v. Mahendra Kumar Jajodia, the NCLAT, New Delhi held that the National Company Law Tribunal, Kolkata erred in holding that since no corporate insolvency resolution process or liquidation proceeding of the corporate debtor were pending, the application …

Proceedings U/S 95 Of The IBC Shall Abate On Death Of The Personal Guarantor: NCLT, New Delhi
3 years ago

Proceedings U/S 95 Of The IBC Shall Abate On Death Of The Personal Guarantor: NCLT, New Delhi

Live Law  

NCLT, New Delhi bench consisting of Justice Ramalingam Sudhakar and Sh. Hemant Kumar Sarangi in the case of Alchemist Asset Reconstruction Company v. Mr. Deepak Puri rejected an application filed by the Financial Creditor u/s 95 of the IBC, 2016 against the Personal Guarantor of the Corporate Debtor on the ground that after death of the Personal Guarantor, the proceedings …

Decree Holders As Creditors Under The IBC - Need For Clarity
3 years ago

Decree Holders As Creditors Under The IBC - Need For Clarity

Live Law  

The Insolvency and Bankruptcy Code, 2016, right from its enactment has been the subject of legal debate. Section 3 of the Code, defines a "creditor" as "any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree-holder;" Whereas the Code provides for and envisages the manner …

If Excluding Time From CIRP Helps The Corporate Debtor To Revive Its Operations, Such Exclusion Must Be Allowed: NCLAT
3 years, 1 month ago

If Excluding Time From CIRP Helps The Corporate Debtor To Revive Its Operations, Such Exclusion Must Be Allowed: NCLAT

Live Law  

The NCLAT Single Bench consisting of Justice M. Venugopal, Judicial Member in the case of Vinod Tarachand Agarwal held that if exclusion of time of CIRP helps to revive the operations of the Corporate Debtor and thus achieve the objective of the Insolvency and Bankruptcy Code, such exclusion must be allowed. The Appellant filed an appeal against the order of …

Imposition Of Moratorium Under IBC Does Not Bar Complaints Against Natural Persons: Madras High Court
3 years, 1 month ago

Imposition Of Moratorium Under IBC Does Not Bar Complaints Against Natural Persons: Madras High Court

Live Law  

The Madras High Court in a Bench comprising of Justice N. Sathish Kumar in M/s. Muzain Hides held that as long as a moratorium under Section 14 of the Insolvency and Bankruptcy Code is imposed, proceedings under Section 138/141 of the Negotiable Instruments Act cannot be initiated against the Corporate Debtor. The counsel for the Petitioners alleged that since the …

Guarantor Whose Guarantee Stands Invoked By Any Creditor Barred Under Section 29A(h) IBC: Supreme Court
3 years, 2 months ago

Guarantor Whose Guarantee Stands Invoked By Any Creditor Barred Under Section 29A(h) IBC: Supreme Court

Live Law  

The Supreme Court has delivered an important judgment interpreting the scope of Section 29A of the Insolvency and Bankruptcy Code. Section 29A IBC specifies the categories of persons who are not eligible to be resolution applicants.Sub-section of Section 29A refers to persons whose guarantees stand invoked by the creditors of the corporate debtor. Adopting a "purposive interpretation" of the provision, …

Financial Creditor Has To Prove That Application Filed U/s 7 IBC Is Not Barred By Limitation; But Materials Produced By Corporate Debtor Can Be Examined: Supreme Court
3 years, 5 months ago

Financial Creditor Has To Prove That Application Filed U/s 7 IBC Is Not Barred By Limitation; But Materials Produced By Corporate Debtor Can Be Examined: Supreme Court

Live Law  

The Supreme Court observed that adjudicating authority can examine the material placed on record by the corporate debtor to determine whether an application filed by financial creditor is not beyond the period of limitation.The court clarified that the burden of prima facie proving occurrence of the default and that the application filed under Section 7 of the Insolvency and Bankruptcy …

The Insolvency And Bankruptcy Code – Respite To MSME
3 years, 6 months ago

The Insolvency And Bankruptcy Code – Respite To MSME

Live Law  

The Insolvency and Bankruptcy Code 2016 has now been maturing over the period of time with various precedents and clarifications being issued from time to time by the adjudicating authority. A new Chapter III-A in the Insolvency and Bankruptcy Code, 2016 was also introduced earlier, through an Ordinance this year for a pre-packaged insolvency resolution process which can only be …

Personal Property of Guarantors Cannot Be Transferred During CIRP of Corporate Debtor: NCLAT
3 years, 6 months ago

Personal Property of Guarantors Cannot Be Transferred During CIRP of Corporate Debtor: NCLAT

Live Law  

The National Company Law Appellate Tribunal has held that the personal property of the Guarantors could not be transferred in the Corporate Insolvency Resolution Process of the Corporate Debtor, even though, their properties were mortgaged with the Financial Creditors.Officiating Chairperson AIS Cheema and Technical Member Alok Srivastava held under Section 61 of IBC that the Resolution. The National Company Law …

Lenders To Initiate Insolvency Proceedings Against Personal Guarantors
3 years, 10 months ago

Lenders To Initiate Insolvency Proceedings Against Personal Guarantors

Live Law  

With the recovery proceedings under the Insolvency and Bankruptcy Code, 2016 not moving at the pace that it should, the Government, on November 15, 2019 came out with a new provision that empowered banks to move an application for initiation of insolvency against personal guarantors, who are usually promoters of big business houses. Petitions before various High Courts were filed …

An Analysis Of The Supreme Court Verdict On Insolvency And Bankruptcy Of Personal Guarantors Of A Corporate Debtor
3 years, 10 months ago

An Analysis Of The Supreme Court Verdict On Insolvency And Bankruptcy Of Personal Guarantors Of A Corporate Debtor

Live Law  

The Ministry of Corporate Affairs, in the bask of implementing the Insolvency and Bankruptcy Laws in India notified and brought into force the provisions of insolvency of personal guarantors of the corporate debtorvide notification dated 15th November, 2019. After enactment of the Code, insolvency proceedings against personal guarantors to corporate debtors would lie before the NCLT, in terms of Section …

IBC - Approval Of Resolution Plan Does Not By Itself Discharge Liabilities Of Personal Guarantor Of Corporate Debtor: Supreme Court
3 years, 10 months ago

IBC - Approval Of Resolution Plan Does Not By Itself Discharge Liabilities Of Personal Guarantor Of Corporate Debtor: Supreme Court

Live Law  

The Supreme Court has held that the approval of a resolution plan does not ipso facto discharge a personal guarantor of a corporate debtor.The release or discharge of a principal borrower from the debt owed by it to its creditor, by an involuntary process, i.e. The Supreme Court has held that the approval of a resolution plan does not ipso …

Guarantors liable if firms fail to repay: Supreme Court
3 years, 10 months ago

Guarantors liable if firms fail to repay: Supreme Court

Hindustan Times  

Promoters, managing directors and chairmen, who stand as personal guarantors to corporate loans, can also be proceeded against before the company law tribunal if their firms are unable to repay debts, ruled the Supreme Court on Friday as it declared “legal and valid” a November 15, 2019, notification issued by the Union government under the Insolvency and Bankruptcy Code. Citing …

Supreme Court Upholds IBC Provisions Applicable To Personal Guarantors Of Corporate Debtors-Read Judgment
3 years, 10 months ago

Supreme Court Upholds IBC Provisions Applicable To Personal Guarantors Of Corporate Debtors-Read Judgment

Live Law  

The Supreme Court today upheld the provisions of Insolvency and Bankruptcy Code, 2016 which applies to personal guarantors of corporate debtors.The bench comprising Justices L. Nageswara Rao and S. Ravindra Bhat approval of a resolution plan relating to a corporate debtor does not operate so as to discharge the liabilities of personal guarantors. The Supreme Court today upheld the provisions …

Supreme Court says personal guarantors liable for corporate debt
3 years, 10 months ago

Supreme Court says personal guarantors liable for corporate debt

The Hindu  

The Supreme Court on Friday upheld a government move to allow lenders initiate insolvency proceedings against personal guarantors, who are usually promoters of big business houses, along with the stressed corporate entities for whom they gave guarantee. In a judgment, which will ring loud and clear across the business community, a Bench of Justices L. Nageswara Rao and S. Ravindra …

President Promulgates IBC Amendment Ordinance To Allow Pre-Packaged Insolvency Process For MSMEs
3 years, 11 months ago

President Promulgates IBC Amendment Ordinance To Allow Pre-Packaged Insolvency Process For MSMEs

Live Law  

The Central Government has promulgated Insolvency and Bankruptcy Code Ordinance 2021 to allow pre-packaged insolvency resolution process for corporate debtors classified as micro, small or medium enterprises under the Micro, Small and Medium Enterprises Development Act, 2006.The Ordinance amends the Insolvency and Bankruptcy Code 2016 to allow the Central Government to notify. The Central Government has promulgated Insolvency and Bankruptcy …

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