The Principal Bench of the National Company Law Tribunal (NCLT) at Delhi on 12 October held that a financial creditor’s proposal to assign its debt to an Asset Reconstruction Company (ARC) does not prevent it from initiating insolvency proceedings against a personal guarantor.
A Bench comprising President Justice Anupinder Singh Grewal and Technical Member Ravindra Chaturvedi admitted Yes Bank‘s application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 (IBC), against Rajesh Madan, personal guarantor of Johnson Watch Company Pvt. Ltd. It observed:
“Further, the argument of the PG that negotiation talks are underway for assigning the FC’s debt to an Asset Reconstruction Company, we observe that the same is a baseless…