A Writ Petition has been filed by the personal guarantors of an MSME Corporate Debtor challenging the constitutional validity of Section 95 of the Insolvency and Bankruptcy Code, 2016. The Petitioners have alleged that Section 95 of the Code is not consistent with the amendments introduced by the 2018 Amendment Act. The question that was asked to be considered was, "Whether Section 95 of the IBC violates Article 14 of the Constitution of India for failing to recognize Personal Guarantors of an MSME Corporate Debtor".
A Writ Petition has been filed by the personal guarantors belonging to an MSME Corporate Debtor. They have challenged the constitutional validity of Section 95 of the Insolvency and Bankruptcy Code, 2016. The petitioners have said that Section 95 of the Code is inconsistent with the amendments introduced by the 2018 Amendment Act. The question that was to be considered was, "Whether Section 95 of the IBC violates Article 14 of the Constitution of India for failing to recognize Personal Guarantors of an MSME Corporate Debtor".
The Petitioners say that the Corporate Debtor, being an MSME, was subject to the creditors' Insolvency Resolution Process. However, one creditor, Siemens Financial Services Pvt. Ltd., has initiated Section 95 proceedings against the Petitioners thereby restraining the petitioners from advancing credits for a Resolution Plan to revive the Corporate Debtor. So, the Petitioners pray to restrain the Respondents from initiating any proceedings under Section 95 of the Code.
Source:
