Guar­an­tor can Hope to Get Money Back Un­der IBC

The Economic Times - - Finance & Commodities -

Mum­bai: A guar­an­tor, who lost money af­ter banks in­voked the guar­an­tee, can hope to re­cover his dues un­der the new re­cov­ery law –– the In­sol­vency and Bank­ruptcy Code. The Delhi Bench of the Na­tional Com­pany Law Tri­bunal(NCLT)hasad­mit­teda­case­filed­byaguar­an­tor un­der in­sol­vency res­o­lu­tion pro­ceed­ings for a loan where the bor­rower had taken the loan from a bank, but failed to re­pay it.

The guar­an­tor, Davin­der Ah­luwalia & Anr, ap­proached NCLT un­der IBC against M/s Sum­mit Avi­a­tion to re­cover dues worth ₹ 1.05 crore, which Pun­jab Na­tional Bank col­lected from the guar­an­tor. The cor­po­rate debtor has mort­gaged­im­mov­ableprop­er­ty­with PNB­forth­eloan­whileDavin­der Ah­luwalia & Anr was the guar­an­tor.

To re­duce the li­a­bil­ity of the bor­rower, the guar­an­tor had paid a sum of ₹ 1.05 crore to the bank but the bor­rower failed re­pay, fol­low­ing which the guar­an­tor has ap­proached the NCLT. The tri­bunal has ap­point­edAb­hishekA­nan­das­the In­terim Res­o­lu­tion Pro­fes­sional.

Since the case has been ad­mit­ted un­der the IBC law, the guar­an­tor would be able to re­cover his dues in 270 days since as per thenorms,the­cred­i­tor­shaveto come up with a re­vival plan within 270 days, or else the as­sets of the com­pany would be put for liq­ui­da­tion.

“Had it not been for IBC, it would have taken ages for a guar­an­tor to re­cover his dues. This­rul­in­grecog­nis­es­theright of the guar­an­tor with jus­tice en­sured in a timely man­ner,” said Sameer Kakar, an in­sol­vency pro­fes­sional reg­is­tered with the In­sol­vency and Bankr-upt­cyBoard of In­dia.

The new re­cov­ery law, which was en­acted early this cal­en­dar, has given hopes not just to lenders for quick re­cov­ery of their dues but also to dif­fer­ent sec­tions of the so­ci­ety.

The Case

M/s Sum­mit Avi­a­tion has mort­gaged im­mov­able prop­erty with PNB for loan

Davin­der Ah­luwalia & Anr was the guar­an­tor

To re­duce li­a­bil­ity of bor­rower, guar­an­tor paid ₹ 1.05 crore to the bank

But bor­rower failed to re­pay

Guar­an­tor has ap­proached NCLT

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