Co-borrower not a personal guarantor where no separate guarantee deed existed under insolvency law

A co-borrower named in loan documents could not be treated as a personal guarantor where the application form, sanction letter, loan agreement and default record described the respondent only as a co-borrower and no separate contract of guarantee or suretyship was executed. The Tribunal held that joint and several liability in the borrowing documents did not by itself satisfy the statutory definition of a personal guarantor under the Insolvency and Bankruptcy Code, 2016. On that basis, the insolvency application under section 95(1) was found not maintainable and dismissed.

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Issues: Whether the respondent, described in the loan documents as a co-borrower and co-obligant, could be treated as a personal guarantor so as to make the application under section 95(1) of the Insolvency and Bankruptcy Code, 2016 maintainable.

Analysis: The relevant documents, including the loan application form, sanction letter, loan agreement, and record of default, described the respondent as a co-borrower and not as a surety or personal guarantor. The contract also reflected joint and several liability of the borrowers and co-borrowers, but no separate guarantee deed or contract of guarantee was shown to have been executed by the respondent. On that basis, the respondent did not fall within the statutory definition of a personal guarantor under section 5(22) of the Insolvency and Bankruptcy Code, 2016. The application was also viewed against the backdrop of the creditor having pursued other remedies in different forums.

Conclusion: The respondent was held not to be a personal guarantor, and the application under section 95(1) was held to be not maintainable and dismissed.

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