Settlement In Principal Borrower’s CIRP Does Not Extinguish Corporate Guarantor’s Liability: NCLT Kochi

The National Company Law Tribunal (NCLT) at Kochi has ruled that a settlement reached during the insolvency proceedings of a principal borrower does not, by itself, prevent insolvency proceedings against its corporate guarantor. The settlement must specifically release the guarantor from its obligations for it to have that effect. The tribunal observed, “any arrangement or…