Under ‘Right of Subrogation’ Guarantor is entitled to Initiate CIRP against Principal Borrower

Orbit Towers Private Limited Vs Sampurna Suppliers Private Limited (NCLT Kolkata) Summary: The National Company Law Tribunal (NCLT), Kolkata Bench, recently ruled that a guarantor who pays a principal borrower’s debt automatically assumes the role of a financial creditor and can initiate the Corporate Insolvency Resolution Process (CIRP) against the borrower. This decision was made in the case of Orbit Towers Private Limited vs. Sampurna Suppliers Private Limited. Orbit Towers, the guarantor, had paid a debt on behalf of Sampurna Suppliers, the principal borrower, after Sampurna default...