Description

The Hon’ble Supreme Court of India (‘SC’) on 21 May 2021, in the matter of Lalit Kumar Jain v. Union of India & Ors., upheld the vires and validity of a notification dated 15 November 2019 (‘Impugned Notification’) issued by the Central Government (‘CG’) by which certain provisions of Part III of the Insolvency and Bankruptcy Code, 2016 (‘Code’) were brought into force only with respect to personal guarantors of corporate debtors. In a significant ruling, the SC further held that mere approval of a resolution plan of a corporate debtor would not ipso facto discharge a personal guarantor (of a corporate debtor) of his/her liabilities under the contract of guarantee.