From perusal of Section 96(1)(b) of IBC, 2016, interim ...

IBC bars fresh proceedings against guarantor's debt, not security interest. Banks can't proceed under SARFAESI once IBC initiated. Guarantor can approach DRT.

Case Laws Indian Laws

July 16, 2024

From perusal of Section 96(1)(b) of IBC, 2016, interim moratorium restrains ongoing or fresh legal action or proceeding regarding debt pertaining to personal guarantor, not security interest created by personal guarantor. No moratorium on bank dealing with security interest. Personal guarantor can approach appropriate forum like DRT to protect assets. Section 96(1)(b) deems legal action or proceeding pending regarding debt stayed upon interim moratorium commencement u/s 96. Bank cannot continue SARFAESI proceedings once IBC proceedings commenced as per Section 238's overriding effect. No sale process commenced regarding mortgaged property. Remedy available under SARFAESI, High Court ought not entertain writ petitions. Bank cannot proceed under SARFAESI due to interim moratorium. Upon moratorium lifting, personal guarantor can approach DRT and raise issues like bank's authority and jurisdiction considering loan sanctioned and disbursed in Dubai.

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From perusal of Section 96(1)(b) of IBC, 2016, interim ...

IBC bars fresh proceedings against guarantor's debt, not security interest. Banks can't proceed under SARFAESI once IBC initiated. Guarantor can approach DRT.

Case Laws Indian Laws

July 16, 2024

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