The present article provides the background and foreground to the captioned issue of treatment of personal guarantors under the Code, to establish how the Mahendra Jajodia order is another sequel to the series of removal of hurdles from the insolvency process of personal guarantors to corporate debtors, by the Hon’ble Supreme Court.
This paper talks about the legal proposition enunciated by the Hon’ble National Company Law Tribunal and Appellate Tribunal on an aspect of restoration of insolvency petition when no liberty of court was sought at the time of withdrawal of petition.
Operational debt under the Insolvency and Bankruptcy Code, 2016 is generally referred to, or has generally been judicially construed as, payment due from the Corporate Debtor for the receipt of goods or services from the supplier/Operational Creditor. But instances galore where the Corporate Debtor was the supplier of goods or services and received some money to that effect, and then failed to honor its commitments i.e., provide the goods or services to the buyer. Can this second episode be categorized as operational debt under the Code?
It must be considered that the legislative intent envisages that all state of affairs should be such that the Corporate Debtor can be revived. This idea percolates through Section 60(5)(a) of The Code as it unequivocally declares that NCLT shall have jurisdiction to entertain “Any application” against the Corporate Debtor without any specification regarding the dispute or application arising from the insolvency of the Corporate Debtor.
Ever since its enactment, the Insolvency and Bankruptcy Code, 2016 is no stranger to the need for judicial intervention to settle issues that are instrumental in achieving the objectives of the Code and providing an effective legal remedy to those who invoke it. In one such circumstance, The NCLAT was called upon to settle some of the highly crucial issues in the cases of Vishnu Kumar Agarwal v. Piramal Enterprises Ltd.  ibclaw.in 16 NCLAT and State bank of India v. Athena Energy Ventures Pvt. Ltd. (2020) ibclaw.in 344 NCLAT.
This article will highlight on the judgment of Martin S.K. Golla v. Wig Associates Pvt. Ltd. dated 4-6-2021, reported at (2021) ibclaw.in 257 NCLAT, which extensively discusses the nature of Section 29A of the code and has held that the ineligibility which has been mentioned in Section 29A shall be attached when the resolution plan is submitted by the applicant.
This article attempts to clear the smokescreen by decoding authority case law on the liability of personal guarantors under IBC. In the end, the Authors have shared take away from the authority case law concerning the personal guarantee.