The New Delhi National Company Law Appellate Tribunal (NCLAT) on 14 July held that financial creditors can directly initiate insolvency proceedings against personal guarantors without any pending Corporate Insolvency Resolution Process (CIRP) or liquidation proceedings against the corporate debtor.
Judicial Member Justice Mohd Faiz Alam Khan and Technical Member Naresh Salecha allowed appeals filed by UCO Bank against orders of the Kolkata Bench of the National Company Law Tribunal (NCLT), which had rejected insolvency applications filed against personal guarantors Subrata Das and Rahul Gupta of Haridra Vintrade Private Limited. The Bench observed:
“It can be said that the IBC is not contemplated to allow Personal Guarantor to…