19/03/2020

A Financial Creditor can file application under section 7 of the Code against a Company who is guarantor to a individual/Sole Proprietorship firm- Laxmi Pat Surana Vs. Union Bank of India – NCLAT

NCLAT held that by virtue of Deed of Guarantee Corporate Debtor being a Corporate Person owes debt to the Bank and that the ‘Financial Debt’ includes a ‘Debt’ owed to a Creditor by ‘Principal’ and ‘Guarantor’. A just Omission or failure to pay on the part of a Guarantor to pay the ‘Financial Creditor’, When the Principal sum is claimed/demanded certainly, will come with the scope of ‘Default’ under Section (3),(12) of the Code. The proceedings under Section 7 of the Code can be triggered by a ‘Financial Creditor’ who had taken Guarantee in respect of ‘Debt’ against ‘Guarantor’ for failure to repay the money borrowed by the ‘Principal Borrower’. To put it explicitly (Ms/ Surana Metals Ltd.) is the ‘Corporate Debtor’ and that the Appellant is the proprietor of the Firm of M/s Mahaveer Construction.

A Financial Creditor can file application under section 7 of the Code against a Company who is guarantor to a individual/Sole Proprietorship firm- Laxmi Pat Surana Vs. Union Bank of India – NCLAT Read Post »

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