Moratorium under Insolvency Law extends to personal guarantor property, blocking SARFAESI enforcement during corporate insolvency.

Under the Insolvency and Bankruptcy Code, 2016, a personal guarantor of a corporate debtor falls within the Code's guarantor framework, and insolvency proceedings concerning such guarantor are linked to the corporate debtor's process before the same NCLT. The moratorium under Section 14, read with the statutory scheme, protects the corporate debtor's assets and, in the circumstances described, extends to the personal guarantor's property as well. As a result, a financial creditor cannot proceed against the personal guarantor under the SARFAESI Act during the moratorium period.

---

---

Issues: Whether the moratorium under the Insolvency and Bankruptcy Code, 2016 extends to the property of a personal guarantor and bars the financial creditor from proceeding against such guarantor under the SARFAESI Act, 2002.

Analysis: A personal guarantor of a corporate debtor falls within the definition of "personal guarantor" under Section 5(22) of the Insolvency and Bankruptcy Code, 2016. In a corporate insolvency resolution process, Section 60 places applications relating to the insolvency resolution or bankruptcy of the personal guarantor before the same National Company Law Tribunal dealing with the corporate debtor. The moratorium under Section 14 prohibits not only proceedings against the corporate debtor but also transfer, encumbrance, alienation or disposal of its assets and enforcement of security interest. The Code further provides that an approved resolution plan is binding on creditors and guarantors. On this scheme, the moratorium protection was held to extend to the personal guarantor in the circumstances of the case.

Conclusion: The moratorium applied to the personal guarantor's property, and the financial creditor could not proceed against the personal guarantor during the moratorium period.

Ratio Decidendi: Under the Insolvency and Bankruptcy Code, 2016, where a corporate insolvency resolution process is pending, the moratorium and the statutory scheme governing guarantors operate to protect the personal guarantor in relation to the corporate debtor's insolvency proceedings, and enforcement against the guarantor cannot proceed contrary to that moratorium.

---