Liabilities Incurred Before Execution Of Guarantee Agreement Can't Be Included In It Unless Explicitly Stated: NCLT Kochi

The NCLT (National Company Law Tribunal), Kochi, ruled that "liabilities incurred before the execution of a guarantee agreement cannot be included in it unless explicitly stated." This decision emphasizes the principle of pari passu in insolvency proceedings, clarifying that a guarantee agreement, unless specifically drafted to cover pre-existing liabilities, generally applies only to obligations incurred after its execution. This ensures that the scope of the guarantee is clearly defined and that creditors cannot unilaterally extend its coverage to older debts without explicit contractual terms.