Insolvency and Bankruptcy Code, 2016: s.14 – Applicability

of, in case of personal guarantor – Whether s.14 of the Code which

provides for a moratorium for the limited period mentioned in the

Code, on admission of an insolvency petition, would apply to a

personal guarantor of a corporate debtor – Held: s.14 is applicable

only in case of corporate debtor – Said section does not mention

about the personal guarantor – So far as personal guarantors are

concerned, Part III has not been brought into force, and neither

has s.243, which repeals the Presidency-Towns Insolvency Act, 1909

and the Provincial Insolvency Act, 1920 – The net result of this is

that so far as individual personal guarantors are concerned, they

shall continue to be proceeded against under the aforesaid two

Insolvency Acts and not under the Code – The scheme of s.60(2)

and (3) of the Code is clear – the moment there is a proceeding

against the corporate debtor pending under the 2016 Code, any

bankruptcy proceeding against the individual personal guarantor

will, if already initiated before the proceeding against the corporate

debtor, be transferred to the National Company Law Tribunal or, if

initiated after such proceedings had been commenced against the

corporate debtor, be filed only in the National Company Law

Tribunal – However, the Tribunal is to decide such proceedings

only in accordance with the Presidency-Towns Insolvency Act, 1909

or the Provincial Insolvency Act, 1920, as the case may be –

Presidency-Towns Insolvency Act, 1909 – Provincial Insolvency Act,

1920 – Recovery of Debts Due to Banks and Financial Institutions

Act, 1993 – Banks/Banking.