Approval of Resolution Plan Doesn't Discharge Personal Guarantor Liabilities; Creditors Can Pursue Recourse.

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Full Text of the Document

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....CIRP - Admissibility of Section 95 Applications against Personal Guarantors - discharge the liabilities of Personal Guarantors on approval of Resolution Plan - The Appellate Tribunal noted that the approval of a Resolution Plan does not automatically discharge the liabilities of personal guarantors, as established by the Supreme Court's judgment in Lalit Kumar Jain. - The Tribunal emphasized that even after the approval of a Resolution Plan, recourse against third parties, including personal guarantors, can still be pursued by Financial Creditors. - Regarding the effect of the Resolution Plan on personal guarantees, the Tribunal observed that the plan explicitly excluded guarantees from assignment and allowed the Financial Creditor to retain them. Therefore, the Adjudicating Authority rightly admitted the Section 95 Applications based on the provisions of the Resolution Plan.....