Lenders Law

Minority shareholder disputes are rarely factored into credit underwriting. In practice, they surface precisely when lenders least want friction—during enforcement, restructurings, schemes of arrangement or exits. When they do, they slow timelines, destabilise valuations and weaken recoveries. This write up examines minority shareholder rights not as a corporate governance abstraction, but as a transaction and enforcement risk. Viewed through a lender and investor lens, minority claims often operate as delay levers—capable of stalling deals, reopening valuations and complicating otherwise executable resolutions. In distressed Indian companies, minority risk is rarely fatal—but it is frequently expensive. While minority shareholders often find themselves in a structurally weak position within Indian companies. However, for lenders, investors and in-house legal teams, minority shareholder disputes are no longer a purely equity-side issue—they directly impact enforcement timelines, transa...

The Supreme Court of India has, in a recent decision in Gloster Limited vs. Gloster Cables Limited & Ors. , delivered an important clarification on the limits of insolvency jurisdiction , particularly where intellectual property ownership disputes intersect with the Corporate Insolvency Resolution Process (CIRP). The ruling is significant for lenders, resolution applicants and insolvency professionals, as it reinforces that insolvency forums are not substitutes for civil courts in adjudicating complex title disputes. Background:  The dispute arose in the CIRP of Fort Gloster Industries Limited , where competing claims were raised over the ownership of the trademark “Gloster” . The successful resolution applicant asserted that the trademark was a corporate debtor asset , capable of being transferred under an approved resolution plan. Another party (who was assigned the rights over the trademark vide an assignment agreement, and was also an associate company of t...

The Insolvency and Bankruptcy Code, 2016 (“IBC”) enables operational creditors to initiate corporate insolvency resolution proceedings under Section 9 upon occurrence of a default. While the statutory framework remains unchanged, recent admission-stage practices—particularly at the Delhi Bench of the NCLT—signal a clear shift toward enhanced procedural and bona fide scrutiny . 1. Affidavit Affirming Absence of Collusion: A recurring direction from the Tribunal is the filing of a specific affidavit affirming that the Section 9 petition is not collusive . This affidavit typically requires the applicant to declare that: The petition is not filed in coordination with the corporate debtor, its promoters, directors, or related parties; The insolvency process is not being triggered to achieve an indirect or strategic objective, including management change, regulatory arbitrage, or shielding the corporate debtor from other proceedings. This concern is no longer theoretical. In  Hyt...

Section 128 of the Indian Contract Act, 1872 stipulates: “ The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract . Laxmi Pat Surana v. Union Bank of India (2021, SC) – A guarantor’s liability arises the moment the principal borrower commits default. SBI v. Athena Energy Ventures (2020, NCLAT) – A creditor can proceed simultaneously against the corporate debtor and guarantor. Thus, it was understood that once the principal borrower has defaulted, and an IBC petition is being filed for the principal borrower, relevant steps may also be taken against the guarantor for initiation of the guarantor's insolvency proceedings simultaneously.  The Turning Point — SBI v. Deepak Kumar Singhania (2025, NCLAT) In February 2025, the NCLAT in State Bank of India v. Deepak Kumar Singhania changed the ground reality. What Happened SBI had lent to LML Ltd. , which defaulted and went into liquidation. ...

The Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process of Personal Guarantors to Corporate Debtors) Rules, 2019 (“PG Rules, 2019”) provide a framework for initiating insolvency proceedings against personal guarantors of corporate debtors. One of the critical procedural requirements under Rule 7(1) is the issuance of Form B notice by the financial creditor or operational creditor to the guarantor. This notice serves as a demand for repayment and must be accompanied by supporting documents to substantiate the default. 1. Purpose of Form B Notice Form B notice is a formal communication to the personal guarantor , informing them of the default by the corporate debtor and demanding repayment of the guaranteed debt. Proper documentation ensures the guarantor is aware of the exact amount of liability , and reduces chances of disputes in later proceedings. Annexing relevant documents also strengthens the application when filed wi...

  In the recent ruling of Home Kraft Avenues vs Jayesh Sanghrajka and Anr . [1] , the National Company Law Appellate Tribunal has held that the creditor will be treated as “secured” during corporate insolvency resolution process (CIRP) despite the charge being unregistered under Section 77 of Companies Act 2013. In this article, the author has tried to analyse the said ruling. Provisions relied upon by NCLAT: The Hon’ble NCLAT relied upon the language stipulated in Section 77(3) of Companies Act 2013, reproduced as follows: “Notwithstanding anything contained in any other law for the time being in force, no charge created by a company shall be taken into account by the ‘liquidator’ or any other creditor unless it is duly registered under subsection (1) and a certificate of registration of such charge is given by the Registrar under sub-section (2).” Considering the aforementioned, the Hon’ble Appellate Tribunal observed that the said section casts an obligation only upon “l...

  In Jaypee Kensingon Boulevard Apartments Welfare Association vs. NBCC (India) Limited [1] , the Hon’ble Supreme Court had held that in case a resolution plan requires modification, the Adjudicating Authority must send back the resolution plan to committee of creditors (CoC) to consider the modifications, so as to afford an opportunity to resolution applicant to modify the plan, and CoC may then re-consider the plan and vote upon same. Similar understanding reflects even from the Hon’ble Supreme Court decision in Committee of Creditors of Essar Steel India Ltd vs. Satish Kumar Gupta [2] , wherein it had affirmed this power to remand back. Now, recently, in Bank of Maharashtra vs. Videocon Industries Ltd. [3] , the primary issue that arose for consideration before the National Company Law Appellate Tribunal, New Delhi (NCLAT) was whether CoC can review its decision of approving the resolution plan. Facts of the case: a) The dissenting financial creditor filed an appeal before N...