The National Company Law Appellate Tribunal (NCLAT), Chennai, has held that a personal guarantor who settled a corporate debtor’s dues with its financial creditor, did not become a financial creditor in the liquidation proceedings.
A bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain found that there was no assignment of the debt in S.V. Ramasamy’s favour. He had also not sought substitution of Tamil Nadu Mercantile Bank (TMB) in the liquidation proceedings.
“It is seen that Mr. S.V. Ramaswamy has settled the dues of the Corporate Debtor to the bank TMB, but there is no assignment of debt. It is inconceivable how he becomes a financial creditor to the Corporate Debtor, when he has not sought…