Personal guarantor insolvency remains maintainable where acknowledgment, co-extensive liability and tribunal jurisdiction are established.

A personal guarantor remained liable where the guarantee deed, demand notice and revival letter showed a subsisting and acknowledged obligation, so the insolvency resolution process was not barred by limitation. A challenge based on foreign exchange regulations and alleged invalidity of the guarantee failed because the guarantee was treated as a capital transaction, the invalidity plea had not been raised below, and the contractual guarantee supported co-extensive liability. The Adjudicating Authority also had jurisdiction to entertain the Section 95 application against the guarantor in the tribunal seized of the corporate debtor's insolvency, and the admission order was upheld because debt, default, service and opportunity were established.

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Issues: (i) whether the insolvency resolution process against the personal guarantor was barred by limitation; (ii) whether the personal guarantor could avoid liability on the basis of the foreign exchange regulations and the alleged invalidity of the guarantee; (iii) whether the Adjudicating Authority had jurisdiction to entertain the application against the personal guarantor and whether the impugned admission order suffered from any legal infirmity.

Issue (i): whether the insolvency resolution process against the personal guarantor was barred by limitation.

Analysis: The liability of a guarantor is co-extensive with that of the principal debtor unless the contract provides otherwise. The record showed a guarantee deed, demand notice, and a revival letter acknowledging liability, which kept the claim alive. The proceedings were therefore tested on the basis of the guarantee documents and subsequent acknowledgment, not merely on the date on which the corporate debtor's account was classified as non-performing asset.

Conclusion: The application was not barred by limitation and the objection failed.

Issue (ii): whether the personal guarantor could avoid liability on the basis of the foreign exchange regulations and the alleged invalidity of the guarantee.

Analysis: The Tribunal held that the guarantee transaction was a capital transaction governed by the foreign exchange regime, but the plea of invalidity was not part of the counter before the Adjudicating Authority. In any event, the guarantee deed, the service address in India, and the revival letter supported the existence of a valid and subsisting guarantee, and the guarantor could not avoid co-extensive liability under the contract law principles relied upon.

Conclusion: The challenge to the validity and enforceability of the guarantee was rejected.

Issue (iii): whether the Adjudicating Authority had jurisdiction to entertain the application against the personal guarantor and whether the impugned admission order suffered from any legal infirmity.

Analysis: Proceedings against a personal guarantor to a corporate debtor fall within the jurisdiction of the National Company Law Tribunal having territorial jurisdiction over the corporate debtor's registered office where a corporate insolvency process is pending. The Code has overriding effect, the proceeding under Section 95 is independent, and the service and opportunity granted to the guarantor were sufficient. The Tribunal also found that the financial creditor had established debt and default for the purpose of admission under the statutory scheme.

Conclusion: The Adjudicating Authority had jurisdiction and the admission order was upheld.

Final Conclusion: The appeal failed, and the admission of insolvency resolution proceedings against the personal guarantor stood sustained.

Ratio Decidendi: A personal guarantor's insolvency resolution proceeding under the Code is maintainable before the tribunal seized of the corporate debtor's insolvency, and the guarantor remains bound by co-extensive liability and a duly acknowledged guarantee unless a legally sustainable defence defeats enforceability.

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