Guaranteeing personal guarantees

Through its recent judgment the apex court has rescued the institution of surety

In a landmark judgment on November 9, the Supreme Court disposed of a batch of 384 petitions (Dilip B Jiwrajka vs Union of India & Others), affirming the constitutionality of provisions in the Insolvency and Bankruptcy Code (IBC) related to the insolvency resolution of personal guarantors to corporate debtors (PGCDs). This decision should expedite the disposal of over 2000-plus applications pending with the Adjudicating Authority for initiation of insolvency resolution of PGCDs, with an underlying debt of Rs 1.64 trillion. This is also likely to open the floodgates for similar applications from creditors who have been waiting in the wings