Financial Creditor Can Initiate Simultaneous Or Independent Proceedings Against Principle Borrower And Personal Guarantor: NCLT Mumbai

The NCLT Mumbai, comprising K. R. Saji Kumar and Sanjiv Dutt, held that the principal debtor and surety are jointly and severally liable, allowing simultaneous or independent proceedings by the creditor. Dewan Housing Finance Corporation Ltd. (DHFL) sanctioned a Rs. 50 crore loan to the Corporate Debtor, who defaulted, leading to a CIRP initiated by Piramal Capital and Housing Finance Limited (PCHFL). \r

Despite the Corporate Debtor's objections, the NCLT found the application maintainable, emphasizing joint and several liabilities under Section 128 of the Indian Contract Act. It dismissed the Corporate Debtor's arguments about repayment obligations and inconsistencies, admitting the application and initiating CIRP against Gigeo Construction Company Private Limited.