Lalit Mishra & Ors. Vs. Sharon Bio Medicine Ltd. & Ors.

NCLAT clarified that it was not the intention of the legislature to benefit the Personal Guarantors by excluding exercise of legal remedies available in law by the creditors, to recover legitimate dues by enforcing the personal guarantees, which are independent contracts. It is a settled position of law that the liabilities of guarantors is co-extensive with the borrower. This Appellate Tribunal held that the resolution under the Code is not a recovery suit. The object of the Code is, inter alia, maximization of the value of the assets of the Corporate Debtor, then to balance all the creditors and make availability of credit and for promotion of entrepreneurship of the Corporate Debtor. While considering the Resolution Plan, the creditors focus on resolution of the borrower Corporate Debtor, in line with the spirit of the Code.