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The Tax Publishers Insolvency and Bankruptcy Code, 2016--IRP Initiation of Insolvency Resolution Process for Personal Guarantors to Corporate Debtors Pragya Lalwani This write-up enlightens the process of initiation of insolvency resolution process for personal guarantors to the corporate debtors who fail to make payment of default on invocation of guarantee. 1. Preamble Where dues of the secured creditor are not fully satisfied with the sale proceeds of the secured assets, the secured creditor may file an application in the form and manner as may be prescribed to the Debts Recovery Tribunal (DRT) having jurisdiction or a competent court, as the case may be, for recovery of the balance amount from the borrower as per section 13(10) of the SARFAESI Act, 2002. Insolvency and Bankruptcy for individuals would be governed by the provisions of Part III of the Insolvency and Bankruptcy Code, 2016 and DRT would act as Adjudicating Authority having territorial jurisdiction over the place where the individual debtor actually resides or carries on business or personally works for gain and can entertain an application under the Code regarding such person. However, by virtue of section 60 of Insolvency and Bankruptcy Code, 2016, National Company Law Tribunal would be the Adjudicating Authority in relation to insolvency resolution and liquidation for corporate persons, including corporate debtors and personal guarantors thereof. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Insolvency and Bankruptcy Code, 2016--IRP

Initiation of Insolvency Resolution Process for Personal Guarantors to Corporate Debtors

Pragya Lalwani

This write-up enlightens the process of initiation of insolvency resolution process for personal guarantors to the corporate debtors who fail to make payment of default on invocation of guarantee.

1. Preamble

Where dues of the secured creditor are not fully satisfied with the sale proceeds of the secured assets, the secured creditor may file an application in the form and manner as may be prescribed to the Debts Recovery Tribunal (DRT) having jurisdiction or a competent court, as the case may be, for recovery of the balance amount from the borrower as per section 13(10) of the SARFAESI Act, 2002.

Insolvency and Bankruptcy for individuals would be governed by the provisions of Part III of the Insolvency and Bankruptcy Code, 2016 and DRT would act as Adjudicating Authority having territorial jurisdiction over the place where the individual debtor actually resides or carries on business or personally works for gain and can entertain an application under the Code regarding such person. However, by virtue of section 60 of Insolvency and Bankruptcy Code, 2016, National Company Law Tribunal would be the Adjudicating Authority in relation to insolvency resolution and liquidation for corporate persons, including corporate debtors and personal guarantors thereof.