In Brief
Personal guarantors challenged a 2019 notification that brought Insolvency Code provisions into force selectively only for them, arguing this was unconstitutional delegation of legislative power. The Supreme Court upheld the notification as valid. The Court held that Parliament, through the 2018 Amendment, had distinctly classified personal guarantors as separate from other individuals through Sections 2(e), 60, and 179, indicating legislative intent for differential treatment. The Court found sufficient legislative guidance and noted the phased rollout followed a pattern of earlier notifications. It also held that approval of a corporate debtor's resolution plan does not automatically discharge personal guarantor liability, as guarantor liability arises from an independent contract unaffected by involuntary discharge of the principal debtor through insolvency."
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