The National Company Law Tribunal (NCLT) at Chennai has reiterated that a settlement reached during the liquidation of a corporate debtor does not absolve a personal guarantor of liability under a separate contract of guarantee.
A bench of Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam admitted an insolvency petition filed by Aditya Birla Finance Limited against G. Thiyagarajan, who had furnished a personal guarantee for credit facilities extended to Velohar Infra Private Limited.
Referring to the Supreme Court’s decision in Lalit Kumar Jain v. Union of India, the tribunal observed that a personal guarantor’s liability survives the discharge of the principal borrower through liquidation or insolvency…