The National Company Law Appellate Tribunal (NCLAT), in its recent ruling in the case of Vishnu Kumar Agarwal v Piramal Enterprises Ltd, while examining the validity of an application made under section 7 of the Insolvency and Bankruptcy Code, 2016 (code), against corporate guarantors, held that: (1) there is no bar on filing two simultaneous applications under section 7 against the principal borrower as well as the corporate guarantors and against both guarantors; and (2) it is not necessary to initiate a corporate insolvency resolution process (CIRP) against the principal borrower before initiating a CIRP against the corporate guarantors.
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The NCLAT was hearing th…
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