Abatement Of Proceedings Initiated Under Section 95 Of Insolvency And Bankruptcy Code, 2016 On Death Of Personal Guarantor

The National Company Law Tribunal (NCLT), New Delhi, ruled that insolvency proceedings initiated under Section 95 of the Insolvency and Bankruptcy Code (IBC) abate upon the death of a personal guarantor. The tribunal emphasized that the legal representatives of the deceased cannot be substituted in ongoing proceedings, as the personal obligation does not transfer to the estate. This decision highlights the limitations of insolvency proceedings concerning personal guarantors and the non-transferability of personal obligations post-death.