SC to examine if moratorium under IBC extends to personal guarantors as well

NEW DELHI: The Supreme Court on Monday said that it would examine the contentious issue of whether the moratorium on recovery of debts under the IBC Code while the resolution process was on would apply to personal guarantors apart from the corporate guarantors.

The top court issued notices on a petition filed by the State Bank of India (SBI) against a controversial February 28, 2018, NCLT order, restraining banks from selling off the assets of personal guarantor and former promoter and MD of Veesons Energy Systems V Ramakrishnan.

The NCLT, Chennai, had ruled that the moratorium on sale of assets while resolution proceedings were on would not only cover corporate guarantors but personal guarantors as well. Personal guarantors are mostly promoters.