In an event of the breach of repayment by Personal Guarantor, the legal consequences would automatically follow as per the provisions contained under Section 118 of the IBC – Tummala Sri Ganesh Vs. State Bank of India and Anr. – NCLAT New Delhi
Hon’ble NCLAT upheld the decision of NCLAT and held that under law the repayment plan will have to be regulated in accordance with Regulations 20 of IBBI Regulations and the stipulated time frame has to be strictly adhered to and in an event of the breach of repayment, by the personal guarantor, the legal consequences would automatically follow as per the provisions contained under Section 118 of the I & B Code. As per Section 118, the plan would be deemed to have come to an end, if it has not been fully implemented. Payment of the initial instalments cannot give a leverage or an excuse to commit subsequent default in the future repayment schedule given under the repayment plan.