Personal Guarantees Excluded from Corporate Debtor Resolution Plans, Third-Party Guarantees Remain Unaffected.

The SC determined that personal guarantees provided by individual guarantors are not to be included in the resolution plan for the CIRP of a corporate debtor. The resolution plan was permitted to proceed, with the clarification that third-party personal guarantees remain unaffected and should not be nullified.

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The Supreme Court in the case of Punjab National Bank ruled that personal guarantees of individual guarantors cannot be part of the resolution plan for the Corporate Insolvency Resolution Process of the corporate debtor. The Court allowed the resolution plan to be executed while clarifying that personal guarantees by third parties should not be cancelled.

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