https://www.taxtmi.com/caselaws?id=784528 Approval of a resolution plan under the IBC does not, by itself, discharge a third-party security provider/surety from contractual liability, unless the plan expressly extinguishes such rights. Interpreting the plan terms, the SC held that the plan explicitly preserved financial creditors' rights against third parties, including security providers/existing promoters, in relation to the "unsustainable debt," while stipulating that any reimbursement/subrogation claim by such security providers against the corporate debtor or related entities upon enforcement would be settled at NIL value. Consequently, the plan could not be read as extinguishing the entire debt so as to bar claims against the third-party surety. The appeal was dismissed. en-us Tue, 06 Jan 2026 00:00:00 +0530 Tue, 06 Jan 2026 18:00:13 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=784528 Approval of a resolution plan under the IBC does not, by itself, discharge a third-party security provider/surety from contractual liability, unless the plan expressly extinguishes such rights. Interpreting the plan terms, the SC held that the plan explicitly preserved financial creditors' rights against third parties, including security providers/existing promoters, in relation to the "unsustainable debt," while stipulating that any reimbursement/subrogation claim by such security providers against the corporate debtor or related entities upon enforcement would be settled at NIL value. Consequently, the plan could not be read as extinguishing the entire debt so as to bar claims against the third-party surety. The appeal was dismissed. Case-Laws IBC Tue, 06 Jan 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=784528