Advised and successfully represented a leading NBFC in proceedings filed against a corporate guarantor under Section 7 of the IBC. In these proceedings, the corporate debtor/corporate guarantor adopted the defence that corporate guarantee provided was in violation of Section 186 of the Companies Act 2013. We on behalf of the Financial Creditor argued that a defence under Section 186 of the Companies Act 2013 was not available and in the facts of the case, the doctrine of indoor management was squarely applicable. Accordingly, in these proceedings the corporate guarantor was admitted to insolvency and the Tribunal observed that under Section 7, the Adjudicating authority is only concerned with determining existence of an unpaid debt, applying the doctrine of indoor management, the Tribunal held that the corporate guarantee was valid and enforceable.
