SC upholds the Centre's notification permitting banks to proceed against personal guarantors under IBC.
"The Supreme Court on Friday upheld a government move to initiate proceedings under the Insolvency and Bankruptcy Code against personal guarantors, usual promoters of big business houses, to corporate debtors facing corporate insolvency resolution process." a report said.
The November 15, 2019 notification allowed creditors like financial institutions and banks to take action against personal guarantors under the Insolvency and Bankruptcy Code(IBC) which was 'legal' and 'valid'.
At Government request, the supreme court has transferred the petitions from the high court to itself. Initially, personal guarantors were challenged before the high court.
"The court had transferred the cases from the High Courts in October last year, saying the IBC was at a "nascent stage" and the interpretations of the provisions of the Code should be taken up by the apex court to avoid any confusion and to settle the law authoritatively." a report said.
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