In Brief
A bank sought to initiate personal insolvency proceedings against the director of a corporate debtor who had given personal guarantees for the company's loans. The respondent filed a writ petition in the High Court claiming his liability as guarantor had been waived. The High Court allowed the petition and quashed the insolvency proceedings. The Supreme Court reversed this, holding that the High Court wrongly interdicted the proceedings before the statutory process was complete. Under the Insolvency and Bankruptcy Code, the Adjudicating Authority must appoint a resolution professional to examine the application and submit a report before making any judicial determination. Questions about whether the debt exists and whether the guarantee was waived must be decided by the Adjudicating Authority, not the High Court in judicial review. The appeal was allowed and the proceedings restored.
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