Personal guarantor insolvency proceedings may begin independently, without prior or pending corporate debtor insolvency or liquidation proceedings.

An insolvency resolution application under Section 95(1) against a personal guarantor is maintainable before the NCLT without any prior, pending, or concluded CIRP or liquidation of the corporate debtor. A guarantee creates financial debt, and the statutory scheme does not make proceedings against the guarantor contingent on proceedings against the principal debtor. As the guarantor's liability is co-extensive with that of the corporate debtor, a financial creditor need not first exhaust remedies against the corporate debtor and may independently elect to invoke the personal guarantee.

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Issues: Whether an application for insolvency resolution against a personal guarantor under Section 95(1) is maintainable before the NCLT where no CIRP or liquidation proceeding has been initiated against the corporate debtor.

Analysis: The statutory scheme treats liability under a guarantee as financial debt and does not make proceedings against a personal guarantor conditional upon prior or pending CIRP against the corporate debtor. The NCLT's jurisdiction concerning a personal guarantor is not excluded merely because no proceeding has been commenced against the corporate debtor. The personal guarantor's liability is co-extensive with that of the principal debtor under Section 128 of the Indian Contract Act, 1872; consequently, the creditor is not required to exhaust remedies against the corporate debtor before proceeding against the guarantor. A financial creditor has concurrent and independent remedies to proceed against the corporate debtor and/or its personal guarantor, and may elect to invoke the personal guarantee directly.

Conclusion: An application under Section 95(1) against a personal guarantor is maintainable before the NCLT even without initiation, pendency, or conclusion of CIRP or liquidation against the corporate debtor.

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