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SC upholds Centre’s notification permitting banks to proceed against personal guarantors under bankruptcy code-India News , Novi Reporter

SC upholds Centre’s notification allowing banks to proceed towards private guarantors below chapter code-India Information , Novi Reporter

The highest court docket dominated that initiation of an insolvency decision plan for a corporation doesn’t absolve company ensures given by people from paying up the dues to monetary establishments

SC upholds Centre's notification permitting banks to proceed against personal guarantors under bankruptcy code

Representational picture. Reuters

New Delhi: The Supreme Court docket on Friday upheld the validity of the Centre’s notification permitting banks to proceed towards private guarantors for restoration of loans given to an organization below the Insolvency and Chapter Code (IBC).

A bench comprising justices L Nageswara Rao and S Ravindra Bhat held that approval of decision plan below the IBC doesn’t discharge private guarantors of their legal responsibility in the direction of the banks.

“Within the judgment, we’ve got upheld the notification,” Justice Bhat stated whereas studying out the conclusion of the judgement which determined as many as 75 petitions pertaining to the validity of the notification.

Petitioners had challenged the 15 November, 2019, notification issued below the IBC and different provisions in so far as they relate to non-public guarantors to company debtors.

Upholding the validity of the notification, the highest court docket dominated that initiation of an insolvency decision plan for a corporation doesn’t absolve company ensures given by people from paying up the dues to monetary establishments.

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Updated: May 21, 2021 — 12:03 pm

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