Live
- ED arrests AAP MLA Amanatullah Khan in Waqf Board appointment scam
- LS polls: Union Minister Bhagwanth Khuba, Dingaleshwara seer, Priyanka Jarkiholi file nominations in K'taka
- Amid show of strength, Congress’ Praniti Shinde files nomination from Solapur
- Tamil Nadu Police gives clean report to Isha Foundation in missing volunteers case
- Home Minister Amit Shah to address public meeting in Goa on April 24
- Gurgaon Open: M Dharma fires 67 for two-shot lead on penultimate day
- Sharad Pawar made many attempts to finish Shiv Sena, claims Maha minister
- Former England opener Raman Subba Row dies aged 92
- IPL 2024: Impact player rule is affecting the progress of half all-rounders, says Zaheer Khan
- ‘Teppa samudram’ review: Entertains with twists and turns
Supreme Court ruled that Banks can invoke personal guarantees
The Supreme Court has ruled that banks can act against guarantors even as proceedings under the insolvency and Bankruptcy Code are on, which is a trouble for industrialists whose guarantees helped corporate entities owned by them get huge loans
NEW DELHI: The Supreme Court has ruled that banks can act against guarantors even as proceedings under the insolvency and Bankruptcy Code are on, which is a trouble for industrialists whose guarantees helped corporate entities owned by them get huge loans.
Justices Rohinton F Nariman and Indu Malhotra allowed an appeal filed by the SBI which challenged concurrent findings of the National Company Law Tribunal withholdings banks from moving against guarantors.
Kapoor Singh said, “As the guarantor’s liability is distinct and separate from that of the corporate debtor, a suit can be maintained against the surety, though the principal debtor has not been sued. Section 14 spoke only of corporate debtors and not about guarantors.”
“Section 14 refers to four matters that may be prohibited once the moratorium comes into effect,” said Justice Nariman in the judgement. The bench added, “A plain reading of the section leads to the conclusion the moratorium can have no manner of application to personal guarantors of a corporate debtor. So far as individual personal guarantors are concerned, they will continue to be proceeded against under the two.”
