https://www.taxtmi.com/caselaws?id=459711 The Bombay HC held that a principal debtor's discharge under a scheme of compromise and arrangement does not affect the guarantor's liability. The court ruled that secured creditors can proceed against guarantors after partial liability discharge, giving guarantors rights under Section 140 to recover from the principal debtor. Citing precedents, the court established that discharge by operation of law doesn't release sureties unless the guarantee contract provides otherwise. The applicant company's release was approved with a No Dues Certificate, but the secured creditor's right to pursue the guarantor remained intact. The review application was rejected. en-us Wed, 26 Feb 2014 00:00:00 +0530 Tue, 24 Dec 2024 20:36:59 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=459711 The Bombay HC held that a principal debtor's discharge under a scheme of compromise and arrangement does not affect the guarantor's liability. The court ruled that secured creditors can proceed against guarantors after partial liability discharge, giving guarantors rights under Section 140 to recover from the principal debtor. Citing precedents, the court established that discharge by operation of law doesn't release sureties unless the guarantee contract provides otherwise. The applicant company's release was approved with a No Dues Certificate, but the secured creditor's right to pursue the guarantor remained intact. The review application was rejected. Case-Laws Companies Law Wed, 26 Feb 2014 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=459711