The recent Supreme Court order is likely to have a strong impact on company promoters who are yet to pay huge bank dues. Following the supreme court directive, the risk of these promoters losing personal property has increased. It is believed that such promoters will soon start paying the huge dues of the banks.
According to a report by the Financial Express, the promoters had earlier asked banks to recover their dues by selling the company’s assets, a time-consuming process. But now the supreme court order allows banks to immediately recover their dues by selling the promoters’ personal property.
What can banks do after SC order
According to reports, company promoters, under insolvency proceedings, are expected to settle their pending dues with banks, fearing the loss of their personal assets. The Supreme Court’s decision said banks can now sell residential property, personal assets like shares and bonds, gold and jewelery of these promoters. Experts believe that this decision will compel such promoters and directors to come forward voluntarily to repay the dues, thereby promoting recovery from bad loans.
The Supreme Court last week upheld the constitutionality of the provisions of the Insolvency and Bankruptcy Code (IBC) regarding personal guarantors in the insolvency resolution process, giving relief to banks, Financial Express reported citing a senior Supreme Court lawyer. This decision is expected to have far-reaching implications for many high-profile cases. The banks are engaged in a legal battle with several high profile names like Anil Ambani, Venugopal Dhoot, Kishore Biyani, Kapil and Dheeraj Wadhawan to recover their dues.
Cases involving personal guarantees linked to corporate loans
According to the Insolvency and Bankruptcy Board of India, as many as 2,289 cases related to personal guarantees related to corporate loans, worth Rs 1.64 trillion, have been filed in the National Company Law Tribunal. Personal guarantors are now forced to be involved in negotiations and settlements with creditors. Experts say promoters are left with few options as the court’s decision has removed ambiguity from this issue. The supreme court’s directives can lead to a quick settlement between the individual guarantors and the banks, as it clarifies the legal position and can prevent the guarantors from starting a long legal battle, speeding up a resolution the outstanding loan.
ALSO READ: Why IDFC FIRST BANK FIRST WOW! Credit Card is the best secured credit card
Latest Business News
Denial of responsibility! vismuseum.org.in is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – at loginhelponline@gmail.com The content will be deleted within 24 hours.