IBBI’s 21 September circular draws attention to Bombay and Delhi High Court judgments on the withdrawal of interim-moratorium protection for personal guarantors to corporate debtors. The relevant amendment to the Insolvency and Bankruptcy Code took effect on 26 May 2026. The judgments explain that the protection ceased from that date even for applications already pending. The clarification concerns the interim protection triggered by filing an application under sections 96 and 124 of the Code.
The clarification is relevant to boards of lenders and companies whose financing relies on promoter or other personal guarantees. Assessments of recovery prospects and financing continuity should reflect the legal position applicable to the guarantor’s proceedings.
Separately, the Liquidation Process Fifth Amendment Regulations, 2026 permit a liquidator to modify an entry in the stakeholder list when additional information warrants a change. The liquidator must inform the adjudicating authority within 30 days. Companies with claims against an entity in liquidation should ensure that supporting records are complete and material new information reaches the liquidator promptly.
IBBI circular on personal guarantors | IBBI liquidation amendment
