In a significant ruling, the Supreme Court of India held that liabilities arising from corporate guarantees qualify as “financial debt” under the Insolvency and Bankruptcy Code (
In a significant verdict, the Supreme Court of India on Tuesday ruled that liabilities arising from corporate guarantees squarely constitute “financial debt” under the Insolvency and Bankruptcy Code (IBC).
A bench comprising justices P S Narasimha and Alok Aradhe upheld the validity and enforceability of corporate guarantees and recognised a consortium of banks led by State Bank of India (SBI) as financial creditors in the insolvency proceedings of Reliance Infratel Limited (RITL).