SC ruling on role of RP in personal guarantor cases paves path for adjudication of nearly 2,000 IBC cases
Published by Moneycontrol
Experts have welcomed the Supreme Court’s judgment on November 9 upholding the constitutional validity of provisions in the Insolvency and Bankruptcy Code (IBC), 2016, relating to personal guarantors. Legal experts have opined that the judgment will enable the NCLT to clear over 2,000 personal guarantee cases that are currently pending.
“This judgment will lead to activation of all personal insolvency matters pending in the NCLTs due to this matter,” said Ashish Pahariya, Partner, DSK Legal.
According to the Insolvency and Bankruptcy Board of India (IBBI), 2,289 cases on personal guarantee were initiated from 2019, and the value of these cases was Rs 1.63 lakh crore. Of these cases, 150 were withdrawn or rejected while 282 were admitted. It is to be noted that the government introduced Sections 95 to 100 to the IBC pertaining to personal guarantors only in 2019, three years after the introduction of the code in 2016.