Debt guarantees

The Supreme Court last week settled an important ongoing issue and strengthened the bankruptcy framework by upholding the constitutional validity of the Insolvency and Bankruptcy Code’s (IBC’s) provisions related to personal guarantors. A number of petitions were filed, challenging the validity of the law in this context. However, a three-judge Bench of Chief Justice of India D Y Chandrachud, Justice J B Pardiwala, and Justice Manoj Misra ruled out any relief for petitioners. The Bench noted the IBC did not suffer from arbitrariness and was constitutionally sound. The petitioners had argued that the relevant provisions violated the principles of natural justice and did not give guarantors the chance to present their case. In this context, the apex court has highlighted