On May 21, 2021, the Supreme Court dismissed pleas on 75 petitions challenging the notification including that on Anil Ambani, Sanjay Singhal, Venugopal Dhoot, Kapil Wadhawan and 45 other industrialists. (The Supreme Court had declared the notification issued by the Union government under Insolvency and Bankruptcy Code, on November 15, 2019 as legal and valid).
The judgment has opened a roadway for the creditors to proceed against guarantors of such defaulting companies to recover debt in case of personal guarantees for securing funds. Significantly, lenders can also proceed against the guarantors at any stage even when the corporate insolvency resolution process of the company is not completed. The issues surrounding such loans is that…
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