In Brief
The Supreme Court held that the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, applies only to corporate debtors and does not extend to personal guarantors. Although a corporate debtor is undergoing insolvency proceedings, creditors can continue proceedings against personal guarantors under laws like SARFAESI. The Court rejected the NCLAT's broad interpretation that the moratorium protects guarantors, noting that Section 14 makes no mention of guarantors, unlike other provisions of the Code. The Court also held that a 2018 amendment clarifying this position has retrospective effect and governs the case. The appeals by the State Bank of India were allowed, reversing the appellate tribunal's decision that had restrained the bank from acting against the personal guarantor.
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