Lalit Kumar Jain V. UOI | Insolvency Proceedings Against Personal Guarantors of Corporate Debtor

As, a matter of practice that the promoter / partner / director of a company often gives personal guarantee for the purpose of loaning monies from financial institutions. The Ministry of corporate affairs notified and brought into force the provisions of insolvency of personal guarantors of the corporate debtor wide notification dated 15.11.2019, and the same was challenged by several personal guarantors before the Supreme Court of India vide judgement titled Lalit Kumar V. UOI and Others.
The Supreme Court, while upholding the notification to be constitutionally valid, stated the same to be need of the hour. Vide the present legal Vlog, I have tried to present my critical analysis of this judgement, focusing on the consequent fallouts of this judgement that the young entrepreneurs / directors / partners / MSMEs might have to bear.
Feel free to write to me in case of any further doubts or queries.
Stay Safe!
Regards
Sonal Alagh
Partner
Alagh & Kapoor Law Offices
[phone]
[e-mail]
A-12, LGF,
Jangpura Extensions
New Delhi - 110014

[@Environ_Prince]

One correction:) Liability of personal guarantor is co-extensive with the liability of the principal borrower is mentioned in Section 128 of the Indian Contract Act, 1872.

[@ShireenKapoor]

Very lucidly explained! Thanks for this info!!

[@NikhilSethi]

Dope