The Supreme Court ruled that creditors can proceed against personal guarantors of a corporate debtor even while insolvency proceedings are on.
The top court said the moratorium envisaged under Section 14 of the Insolvency and Bankruptcy Code will not apply to the personal guarantors. The provision places a moratorium on any suits or proceedings against the company during the insolvency resolution period.
We have seen that Part III (of the code) has not been brought into force, and neither has Section 243, which repeals the Presidency-Towns Insolvency Act, 1909 and the Provincial Insolvency Act, 1920, said a bench of Justice Rohinton Fali Nariman and Justice Indu Malhotra on Aug. 14.
The top courts ruling came on an appeal filed by the State…
Read the full article at: https://www.bloombergquint.com/law-and-policy/2018/08/16/banks-can-act-against-personal-guarantors-of-insolvent-companies-rules-supreme-court
