The Supreme Court on Thursday allowed banks to launch insolvency proceedings under the Insolvency and Bankruptcy Code or IBC against those who had furnished personal guarantees for loans taken by companies that have defaulted.
This ruling, a blow to many promoters, is significant more so because it again signals a shift in favour of Indian lenders- bolstering their ability to enforce guarantees without long legal battles besides leading to faster recoveries. It comes at a time when banks and institutional lenders dampened by earlier court rulings are increasingly taking recourse to other avenues for recovery other than the IBC route.
It should hopefully end the gaming of the legal system by many promoters who have stymied the effort…
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