It may be difficult for banks to dispose of personal properties given as a collateral for a loan when the company is referred to the National Company Law Tribunal (NCLT). The Chennai bench of NCLT ruled that if promoters or directors of a company have pledged their personal property and the committee of creditors (CoC) sells off the property, then the guarantor can lay claim to the company to the extent of the value of the property disposed of.
The case was between V Ramakrishnan, managing director and promoter of Veesons Energy Systems Pvt Ltd, and State Bank of India (SBI). Ramakrishnan had given a personal guarantee for a loan secured by his company. The promoter’s contention was that since the corporate insolvency resolu…
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