Resolution Plan Does Not Extinguish Third-Party Rights Unless Debt Paid

UV Asset Reconstruction Company Limited Vs Electrosteel Castings Limited (Supreme Court of India) Deed of Undertaking Is Not a Guarantee: Resolution Plan Does Not Extinguish Rights Against Third-Party Security Providers Unless Debt Is Fully Satisfied The Supreme Court held that Clause 2.2 of the Deed of Undertaking executed by Electrosteel Castings Limited (ECL) did not constitute a “contract of guarantee” under Section 126 of the Indian Contract Act, 1872. The clause merely imposed an obligation on ECL, as promoter, to arrange infusion of funds into the borrower (ESL) to ensure compliance...