The Insolvency and Bankruptcy Code, 2016 (IBC),
has redefined credit enforcement and insolvency landscape in India
by instituting a streamlined and time-bound resolution framework.
Among its most contentious developments is the inclusion of
personal guarantors within its purview; a move that invites deeper
scrutiny of whether this innovation advances creditor recovery at
the cost of corporate independence, or whether it signifies a
broader commitment to corporate coherence.
This article critically evaluates the legal architecture
governing personal guarantors under the IBC, with particular focus
on the landmark decision of the Supreme Court in Lalit Kumar
Jain v. Union of India (2021). It explores the jurisprudential
and practical implications of this shift, arguing that while
creditor rights have been robustly reinforced, a careful
equilibrium must be maintained to protect the foundational
principles of company law.
