CIRP can be initiated against corporate debtor without proceeding against principal borrower

Last updated: 28 October 2022

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The Supreme Court has clarified that a Corporate Insolvency Resolution Process (CIRP) can be initiated against a corporate debtor who has provided a guarantee, even if the principal borrower is not a corporate entity. The Court affirmed that the liability of the guarantor is co-extensive with the principal borrower, meaning the financial creditor can proceed directly against the guarantor upon default. This decision upholds the broad scope of the Insolvency and Bankruptcy Code, 2016.

Court :
Supreme Court of India

Brief :
The Corporate Insolvency Resolution Process("CIRP") can be initiated against the corporate debtor without proceeding against the principal borrower.

Citation :
Civil Appeal No. 9286 of 2019

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FCS Deepak Pratap Singh

Associate Vice President - Secretarial & Compliance (SBI General Insurance Co. Ltd.)

Dear Friends, MyselfFCSDeepak P. Singh ( B.Sc.. LLB, FCS. FIII, CIAFP, CRMP, ID) , A Fellow Member of ICSI, Law Graduate ,Fellow Member of Insurance Institute of India, Certified Independent Director ,Certified Insurance Anti Fraud Professional , Certified Risk Governance Professional ( ICSI-III) and cleared Limited I ... Read more

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