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ARTICLE · 31 AUGUST 2017

Guarantor Can Recover Dues Under IBC

Mansukhlal Hiralal & Company
Mansukhlal Hiralal & Company
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The Guarantor furthermore relied on the cheque issued by the Corporate Debtor to Guarantor for the aforesaid amount, which was returned dishonoured.

IndiaInsolvency/Bankruptcy/Re-Structuring
Mansukhlal Hiralal & Company
Mansukhlal Hiralal & Company
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Under the newly legislated Insolvency and Bankruptcy Code 2016 (IBC), the New Delhi bench of National Company Law Tribunal (NCLT) passed a recent order dated 1 August 2017 admitting an application for initiating corporate insolvency resolution process by a guarantor of a corporate debtor.

Facts of the Case

  • Sumit Aviation Private Limited (Corporate Debtor) had taken a loan from Punjab National Bank (Bank) and the petitioner, Mr Davinder Ahluwalia (Guarantor) was the guarantor for the said loan and had mortgaged his immovable property with the Bank. To redeem the aforesaid mortgage of his property and reduce the liability of the Corporate Debtor, the Guarantor paid a sum of Rs 1.05 crores to the Bank.

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