Personal-guarantee liability remains uncapped by mortgaged-property value, while repayment plans require the statutory creditor voting majority.
Clause 24 of the deed of guarantee addresses the security arrangement and does not limit the personal guarantors' joint and several liability, created under Clauses 1, 6 and 9, for principal, interest, costs and charges. A final unchallenged debt-recovery determination of that liability cannot be reopened through collateral repayment-plan proceedings under Section 114. Repayment plans under Sections 111 and 114 require affirmative creditor votes representing 66% of the voting share; without that approval, the Adjudicating Authority cannot override creditors' commercial decision or independently approve the plan.
Issues: (i) Whether Clause 24 of the Deed of Guarantee restricted the personal guarantors' liability to the market value of their mortgaged properties; (ii) Whether the repayment plans could be approved despite failing to secure the prescribed creditor voting threshold.
Issue (i): Whether Clause 24 of the Deed of Guarantee restricted the personal guarantors' liability to the market value of their mortgaged properties.
Analysis: Clauses 1, 6 and 9 imposed joint and several liability for the full principal amount, interest, costs and charges, irrespective of enforcement or realisation of securities. On harmonious construction, Clause 24 concerned the security arrangement and did not override the primary liability undertaken under the earlier clauses. A final and unchallenged debt-recovery adjudication had already crystallised the guarantors' liability, which could not be reopened through collateral proceedings under Section 114.
Conclusion: Clause 24 did not cap the personal guarantors' liability at the value of their mortgaged properties; they remained jointly and severally liable for the crystallised debt. The issue is against the appellants.
Issue (ii): Whether the repayment plans could be approved despite failing to secure the prescribed creditor voting threshold.
Analysis: Under Sections 111 and 114, approval required affirmative votes representing the statutory 66% voting share. The repayment plans did not obtain that threshold. The Adjudicating Authority could not substitute its own view for the creditors' commercial decision or independently approve an unapproved plan.
Conclusion: The repayment plans could not be approved without the requisite 66% creditor approval, and their rejection remained effective. The issue is against the appellants.
Final Conclusion: The finality of the guarantors' full liability and the creditors' rejection of repayment plans lacking statutory approval govern the insolvency process.
Ratio Decidendi: A finally determined personal-guarantee liability cannot be re-agitated in collateral repayment-plan proceedings, and a repayment plan lacking the statutory creditor majority cannot be independently approved.