PG- Adjudicating Authority in case of Personal Guarantor

Discharge of Principal Borrower when Resolution Plan is approved in CIRP of Surety? | Guarantee extinguished after approval of Resolution Plan? | Simultaneous IBC Proceedings against Corporate Debtor and Guarantor | Subrogation in Insolvency | Assets of Subsidiary Company in Resolution Plan of Holding Company – BRS Ventures Investments Ltd. Vs. SREI Infrastructure Finance Ltd. and Anr. – Supreme Court

In this important judgment, Hon’ble Supreme Court clarifies following issues:

A. Liability of Guarantor / Surety
B. Discharge of Principal Borrower when Resolution Plan is approved in CIRP of Surety/ Guarantor vs. Discharge of Surety/ Guarantor when Resolution Plan is approved in CIRP of Principal Borrower?
C. Simultaneous Proceedings under the IBC against Corporate Debtor and Guarantor
D. Subrogation under Section 140 of the Indian Contract Act, 1872.
E. Whether the assets of the Corporate Debtor were part of CIRP in respect of Corporate Guarantor.

Discharge of Principal Borrower when Resolution Plan is approved in CIRP of Surety? | Guarantee extinguished after approval of Resolution Plan? | Simultaneous IBC Proceedings against Corporate Debtor and Guarantor | Subrogation in Insolvency | Assets of Subsidiary Company in Resolution Plan of Holding Company – BRS Ventures Investments Ltd. Vs. SREI Infrastructure Finance Ltd. and Anr. – Supreme Court Read Post »

Whether NCLT has jurisdiction to initiate insolvency u/s 95 of IBC against a Personal Guarantor even in CIRP against the Corporate Debtor is pending (not admitted) or withdrawn on settlement – Mahendra Kumar Agarwal Personal Guarantor of Gati Infrastructure Bhamsey Power Pvt. Ltd. Vs. PTC India Financial Services Ltd. – NCLAT Chennai

In the present case, the CIRP proceedings against the Corporate Debtor were pending on the date when the petition was filed before the Adjudicating Authority by the Financial Creditor and on the date when the impugned order came to be passed, as on date, they continued to be pending.
NCLAT Chennai Bench held that:
(i) It cannot be gainsaid that the pendency of the CIRP proceedings, against the Corporate Debtor is not a condition precedent for initiation of insolvency proceedings against the Personal Guarantor. Therefore, it is crystalline clear that the insolvency proceedings can be initiated against the Personal Guarantor of a Corporate Debtor, even if, no insolvency proceedings are pending against the Corporate Debtor.
(ii) It is well settled by now, that the insolvency Proceedings can be initiated against the Personal Guarantor, even when no proceedings are pending against the Corporate Debtor.
(iii) And concluded that the Adjudicating Authority has jurisdiction to entertain/initiate the insolvency proceedings of the Personal Guarantors even when no CIRP proceedings is pending against the Corporate Debtor and in any event, the CIRP proceedings is pending and continued to be pending, against the Corporate Debtor.

Whether NCLT has jurisdiction to initiate insolvency u/s 95 of IBC against a Personal Guarantor even in CIRP against the Corporate Debtor is pending (not admitted) or withdrawn on settlement – Mahendra Kumar Agarwal Personal Guarantor of Gati Infrastructure Bhamsey Power Pvt. Ltd. Vs. PTC India Financial Services Ltd. – NCLAT Chennai Read Post »

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