The recent Supreme Court ruling, confirming the amendment to Insolvency Bankruptcy Code allowing creditors to proceed against personal guarantors of defaulting companies to recover debt has not only opened up a new dimension in the corporate insolvency resolution, but also caused a furor among the promoter families.
In Lalit Kumar Jain vs Union of India, 2021, the Supreme Court upheld the Insolvency and Bankruptcy Rules, 2019 notified by the Indian Government on 15 November 2019 (effective from 1 December 2019) paving way for lenders to go ahead with proceedings for recovery initiated against personal guarantors to corporate debtors undergoing CIRP (corporate insolvency resolution process), in any Court or Tribunal.
While this latest decis…
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