Case Law Details
Amit Jain v. Siemens Financial Services Pvt. Ltd. (NCLAT Delhi)
Recently, the NCLAT Delhi, in a recent judgment of Amit Jain v. Siemens Financial Services Pvt. Ltd, has held that the Section 10A of the Insolvency and Bankruptcy Code, 2016 is applicable only to the corporate debtor, but not to the personal guarantor of the corporate debtor.
Legislative Background of Section 10A of IBC
The Insolvency and Bankruptcy Code was introduced with the aim to maximize the asset value of the Corporate Debtor and the Supreme Court in the case of Swiss Ribbon Pvt Ltd v. UOI has held that the IBC envisages the resolution of the Corporate Debtor by maximizing the value of the assets of the corporate debtor.
The Covid-19 induced lockdown had stalled almost all the economic activities during that period. As a consequence, many companies and firms were shut down and there was no money to repay the debt to the creditors. In order to save the corporate debtors from facing liquidation proceedings and to ensure smooth recovery of business sector post lockdown, the Central Government introduced the Section 10A of the IBC.
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