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2023 (12) TMI 1218 - AT - Insolvency and BankruptcyApproval of Resolution Plan - Appellant are personal guarantors of the Corporate Debtor - HELD THAT - The Resolution Plan does not absolve the personal guarantors from their guarantee. The law well settled by the Hon ble Supreme Court in the matter of LALIT KUMAR JAIN VERSUS UNION OF INDIA AND ORS. 2021 (5) TMI 743 - SUPREME COURT , that by approval of resolution plan the guarantees are not ipso facto discharged. The resolution applicant has taken liability of only one crore, the other liabilities of the personal guarantors are not discharged. There are no ground to interfere with the approval resolution plan within meaning of Section 61 - the order of the Adjudicating Authority approving the Resolution Plan need not be interfered - there is no merit in the Appeal - appeal dismissed.
Issues involved: Condonation of delay in filing appeal, Challenge to approval of Resolution Plan by personal guarantors, Liability of personal guarantors under Resolution Plan
In the present case, an application was made to seek condonation of a 13-day delay in filing the appeal, citing medical indisposition as the reason for the delay. The delay was ultimately condoned after considering the circumstances presented by the Appellant. The appeal was filed against the order approving the Resolution Plan and allowing a specific application filed by the Resolution Professional. The Appellants, who are personal guarantors of the Corporate Debtor, challenged the approval of the Resolution Plan based on specific clauses mentioned in the plan, particularly emphasizing the basis of the Resolution Plan outlined in Clause 7.1. The Resolution Plan, as per the submissions made by the Appellants, did not absolve the personal guarantors from their guarantee obligations. Citing established legal principles, it was noted that the approval of a resolution plan does not automatically discharge guarantees, as clarified by the Hon'ble Supreme Court in a previous case. Despite the resolution applicant taking liability of only one crore, other liabilities of the personal guarantors remained unaffected. Consequently, the Tribunal found no grounds to interfere with the approval of the Resolution Plan under Section 61, leading to the dismissal of the Appeal due to lack of merit.
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