This website is only for informational purposes. Visitors are requested to note that the information is intended to be correct, complete, and up-to-date. Juris Corp does not warrant that the information contained on this website is accurate or complete, and disclaims any and all liability to any person for any loss or damage caused by errors or omissions, whether such errors or omissions result from negligence, accident or any other cause.

This website is not intended to be a source of advertising or solicitation. The reader must not consider the information contained herein to be an invitation for a lawyer-client relationship, must not rely on information provided herein and must seek independent advice. Transmission, receipt or use of any information on this website does not constitute or create a lawyer-client relationship. No recipients of content from this website should act or refrain from acting, based upon any or all of the contents of this website.

Furthermore, Juris Corp does not wish to represent anyone desiring representation based solely upon viewing this web site. Finally, the reader is warned that the use of e-mail for confidential or sensitive information is susceptible to inherent risks of lack of confidentiality associated with sending e-mail over the internet.

By clicking on the "I understand and agree" button below, the user acknowledges that:

  • This website is not a mode of advertisement, promotion, personal communication, or solicitation of any sort whatsoever and the user wishes to gain information about us for his/her own reasons;
  • Entering into this website does not establish a lawyer-client relationship.

We are not liable for any consequence of any action taken by the user relying on information provided under this website. In cases where the user has any legal issues, he/she must seek independent legal advice.

JC - Legal Updates - Insolvency Resolution Process against Personal Guarantors - Constitutionally Valid!

Legal Updates

16 Nov 2023

Insolvency Resolution Process against Personal Guarantors - Constitutionally Valid!

Brief Overview:
The constitutional validity of provisions relating to the initiation of insolvency resolution process against personal guarantors under the Insolvency and Bankruptcy Code (“IB Code”) were upheld in a landmark decision of the Supreme Court.
Technical Details:
The Supreme Court while upholding the constitutional validity of Sections 95 to 100 of the IB Code (pertaining to insolvency resolution process of personal guarantors) has held that, the interim moratorium imposed is primarily in respect of a debt as opposed to a debtor. Further, not allowing an opportunity of hearing to the personal guarantors before admission of an insolvency petition filed against them is not unconstitutional.
The Supreme Court also held that the role of a resolution professional is that of a facilitator and is not to perform an adjudicatory function.
(To be updated after the judgment is uploaded).
JC Takeaways:
1)  Insolvency Proceedings can be initiated against personal guarantors under the IB Code.
2)  Interim moratorium is to protect the personal guarantors from the legal actions arising out of the debt.
3)  The role of a resolution professional under Section 99 of the IB Code is that of a facilitator, inter alia to gather relevant information and recommend acceptance or rejection of application, instead of playing an adjudicatory role.
For further details, please see:
Surendra B. Jiwrajika and Anr. v. Omkara Assets Reconstruction Private Limited
SLP(C) No. 016464/2021
For any queries / clarifications, please feel free to ping us and we will be happy to chat:

  Mr. Ankit Sinha (ankit.sinha@jclex.com)
  Ms. Palak Nenwani (palak.nenwani@jclex.com)
  Mr. Ronit Chopra (ronit.chopra@jclex.com)