The National Company Law Tribunal (NCLT) at Mumbai recently reaffirmed that insolvency proceedings against personal guarantors under the Insolvency and Bankruptcy Code can be initiated even if no CIRP is pending against the corporate debtor, relying on the Supreme Court’s ruling in State Bank of India v. Mahendra Kumar Jajodia(2022).
A coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar reiterated that the tribunal’s jurisdiction is independent of any insolvency action against the borrower.
It observed, “Under Section 60(1) of the Insolvency and Bankruptcy Code, 2016, the National Company Law Tribunal (NCLT) is the Adjudicating Authority for insolvency and bankruptcy proceedings relating to personal…