Topic
The Supreme Court ruled that a personal guarantee defined as a Facility Agreement and deemed part of the loan agreement 'as if set out in extension' incorporates the loan agreement's arbitration clause under Section 7(5). This binds guarantors to arbitration without a separate clause, overturning orders deleting them from proceedings.
NCLAT holds that any renewal, novation, or variance of credit facilities without the personal guarantor's consent automatically discharges their liability under Section 133 of the Indian Contract Act. This ruling reinforces the protection of guarantors under the IBC and sets a precedent for creditors to secure explicit consent for modifications.
NCLAT rules that a debenture trustee can file a Section 95 IBC application against a personal guarantor only if the guarantee deed expressly permits it, clarifying the scope of creditor locus in personal insolvency proceedings. This holding impacts debenture trustees, personal guarantors, and lenders relying on guarantee deeds for insolvency actions.
NCLAT rules that a personal guarantor's insolvency can be initiated under the IBC based on contractual notice and cumulative evidence, even if postal receipts are absent. The ruling clarifies that strict proof of service is not mandatory if the guarantee deed authorizes alternative invocation methods, impacting lenders and guarantors in insolvency proceedings.
NCLAT clarifies that a power of attorney holder can file an insolvency application under Section 95 IBC if authorised by a board resolution, even without explicit mention in the power of attorney. The ruling underscores the sufficiency of corporate authorisation for initiating personal insolvency proceedings against guarantors.