1. Multiple appeals arise regarding whether simultaneous corporate insolvency resolution process (CIRP) proceedings against a principal corporate debtor and its corporate guarantor are maintainable under the insolvency law. (Para 1 , 2 )
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2026 Supreme(SC) 216
SUPREME COURT OF INDIA
DIPANKAR DATTA, AUGUSTINE GEORGE MASIH, JJ.
ICICI Bank Limited – Appellant
Versus
Era Infrastructure (India) Limited – Respondent
Civil Appeal No. 6094 of 2019
WITH
Anubhav Anilkumar Agarwal – Appellant
Versus
Bank of India and Another – Respondents
Civil Appeal Nos. 827-828 of 2021
WITH
ICICI Bank Limited – Appellant
Versus
Hyderabad Ring Road Project Private Limited – Respondent
Civil Appeal No. 6093 of 2019
WITH
International Finance Corporation – Appellant
Versus
Punj Lloyd Upstream Limited – Respondent
SLP (C) No. 21778 of 2019
WITH
Phoenix Arc Private Limited – Appellant
Versus
G.R.K. Reddy and Others – Respondents
Civil Appeal No. 40 of 2020
WITH
State Bank of India – Appellant
Versus
Bijay Kumar Agarwal and Another – Respondents
Civil Appeal No. 2715 of 2020
WITH
Mohan Nathuram Sakpal – Appellant
Versus
State Bank of India and Another – Respondents
Civil Appeal No. 4018 of 2023
WITH
Noil Christuraj, Suspended Director, M/s. Fossil Logistics Private Limited – Appellant
Versus
State Bank of India and Another – Respondents
Civil Appeal No. 7231 of 2024
Decided On : 26-02-2026
Advocates appeared:
For the Appellant(s) : Ms. Komal Mundhra, AOR Mr. Saurabh Agrawal, Adv. Mr. Aniket Bhattacharyya, Adv. Mr. Ranghasayee, Adv. Ms. Poornima Devi, Adv. Mr. Diwakar Mishesmori, Adv. Ms. Pratiksha Mishra, Adv. Mr. Karun Mehta, AOR Mr. Sanjay Kapur, AOR Mr. Surya Prakash, Adv. Ms. Shubhra Kapur, Adv. Ms. Mahima Kapur, Adv. Ms. Mansi Kapur, Adv. Ms. Santha Smruthi, Adv. Mr. Anuraj Mishra, Adv. Mr. Gopal Sankaranarayan, Sr. Adv. Mr. Abhijeet Sinha, Sr. Adv. Mr. Vipul Jai, Adv. Mr. Soayib Qureshi, AOR Mr. Saikat Sarkar, Adv. Mr. Vishal Sinha, Adv. Ms. Neha Nagpal, Adv. Mr. Puneet Singh Bindra, Adv. Mr. Anirudh Purshottaman, Adv. Ms. Saumya, Adv. M/S. Cyril Amarchand Mangaldas Aor, AOR Ms. Surabhi Khattar, Adv. Mr. Sriharsh Raj, Adv. Mr. Shivansh Vishwakarma, Adv. Ms. Pallavi Agarwal, Adv. Mr. Suresh Dutt Dobhal, AOR Mr. Shikhar Kumar, Adv. Mr. Abhinav Sharma, Adv.
For the Respondent(s):Mr. Ankur Mittal, AOR Ms. Nidhi Mittal, Adv. Ms. Muskan Jain, Adv. Mr. Nithin Chowdary Pavuluri, Adv. Ms. Soubhagyavalli Vedantam, Adv. Mr. Vijaya Bhaskar Reddy Kandhala, Adv. Mr. Subham Saurabh, Adv. Mr. Gp. Capt. Karan Singh Bhati, AOR Mr. Devender Singh, Adv. Mr. Hitesh Kumar Sharma, Adv. Mr. Amit Kumar Chawla, Adv. Mr. Akhileshwar Jha, Adv. Mr. Varun Varma, Adv. Ms. Shreya Jha, Adv. Mr. Vaibhav Manu Srivastava, AOR Ms. Savita Nangare, Adv. Mr. Tungesh, AOR Mr. T. Ravichandran Thru Vc, Adv. Mr. K. V. Mohan, AOR Mr. K.v. Balakrishnan, Adv. Mr. Devesh Kr. Khanduni, Adv. Mr. Soumya Dutta, AOR Mr. Siddhant Upmanyu, Adv. Mr. Abhijeet Pandey, Adv. Mrs. Indrani Dey, Adv. Mr. Tapesh Kumar Singh, Sr. Adv. Mr. Prabhat Ranjan Raj, AOR Mr. Anil Kumar, Adv. Mr. Gunjesh Ranjan, Adv. Mr. Amarjeet Gupta, Adv. Mr. Mannoneet Dwidedi, Adv. Mr. Abhishek Kumar, Adv. Mr. Prakash Kumar Mangalam, Adv. Mr. Prabhat Kaushik, AOR Mr. Venkata Subramanian, Adv. Mr. Prabhat Kaushik, Adv. Mr. Paramvir Singh Narang, Adv. Mr. Vinay Tomar, Adv. Ms. Pratibha Kaushik, Adv. Ms. Harshita Lulla, Adv. Ms. Shruti Jangid, Adv. Mr. Maneesh Arora, Adv. Mr. Lakhan Singh, Adv. M/S. Dua Associates, AOR Mr. Samar Vijay Singh, AOR Mr. Shashwat Parihar, Adv. Ms. Sabarni Som, Adv. Mr. Keshav Mittal, Adv. Mr. Aman Dev Sharma, Adv. Mr. Gaj Singh, Adv. Mr. Amit Ojha, Adv. Mr. Azeem A Dost, Adv. Mr. Prashant Sharma, Adv. Mr. Mayank Sapra, Adv. Mr. Snehasish Mukherjee, AOR Mr. Sulaiman Bhimani, Adv. Ms. Lalima Das, Advocate General Mr. Brijesh Kumar Tamber, AOR Mr. Rajesh Kumar Gautam, AOR Mr. Anant Gautam, Adv. Mr. Deepanjal Choudhary, Adv. Mr. Vibhu Sharma, Adv. Ms. Likivi Jakhalu, Adv. Mr. Aman Gahlot, Adv. Mr. Rishi Chauhan, Adv. Ms. Azal Aekram, Adv. Ms. Pallavi Pratap, AOR Mr. Amjid Maqbool, Adv. Ms. Prachi Pratap, Adv. Dr. Prashant Pratap, Adv. Ms. Yashvi Aswani, Adv. Ms. Anupriya Dixit, Adv. Mr. Ashish Aggarwal, Adv. Ms. Ramya Aggarwal, Adv. Ms. Tanya Aggarwal, Adv. Mr. Vinayak Mehrotra, AOR Mr. Kaushik Poddar, AOR Mr. Siddharth Sharma, AOR Ms. Ishika Chauhan, Adv. Mr. B. K. Satija, AOR Mr. Shashwat Anand, AOR Mr. Rishab Kumar, Adv. Mr. Shashank Singh, Adv. Mr. Kanishk Khetan, Adv. Mr. Dharampal Singh, Adv. Mr. Prem Sagar Keshri, Adv. Mr. Mayank Rajan Joshi, Adv. Mr. Pankaj Bhagat, AOR Mr. Ravi S Gupta, Adv. Ms. Dolly Nair, Adv.
For the Appellant(s) : Ms. Komal Mundhra, AOR Mr. Saurabh Agrawal, Adv. Mr. Aniket Bhattacharyya, Adv. Mr. Ranghasayee, Adv. Ms. Poornima Devi, Adv. Mr. Diwakar Mishesmori, Adv. Ms. Pratiksha Mishra, Adv. Mr. Karun Mehta, AOR Mr. Sanjay Kapur, AOR Mr. Surya Prakash, Adv. Ms. Shubhra Kapur, Adv. Ms. Mahima Kapur, Adv. Ms. Mansi Kapur, Adv. Ms. Santha Smruthi, Adv. Mr. Anuraj Mishra, Adv. Mr. Gopal Sankaranarayan, Sr. Adv. Mr. Abhijeet Sinha, Sr. Adv. Mr. Vipul Jai, Adv. Mr. Soayib Qureshi, AOR Mr. Saikat Sarkar, Adv. Mr. Vishal Sinha, Adv. Ms. Neha Nagpal, Adv. Mr. Puneet Singh Bindra, Adv. Mr. Anirudh Purshottaman, Adv. Ms. Saumya, Adv. M/S. Cyril Amarchand Mangaldas Aor, AOR Ms. Surabhi Khattar, Adv. Mr. Sriharsh Raj, Adv. Mr. Shivansh Vishwakarma, Adv. Ms. Pallavi Agarwal, Adv. Mr. Suresh Dutt Dobhal, AOR Mr. Shikhar Kumar, Adv. Mr. Abhinav Sharma, Adv.
For the Respondent(s):Mr. Ankur Mittal, AOR Ms. Nidhi Mittal, Adv. Ms. Muskan Jain, Adv. Mr. Nithin Chowdary Pavuluri, Adv. Ms. Soubhagyavalli Vedantam, Adv. Mr. Vijaya Bhaskar Reddy Kandhala, Adv. Mr. Subham Saurabh, Adv. Mr. Gp. Capt. Karan Singh Bhati, AOR Mr. Devender Singh, Adv. Mr. Hitesh Kumar Sharma, Adv. Mr. Amit Kumar Chawla, Adv. Mr. Akhileshwar Jha, Adv. Mr. Varun Varma, Adv. Ms. Shreya Jha, Adv. Mr. Vaibhav Manu Srivastava, AOR Ms. Savita Nangare, Adv. Mr. Tungesh, AOR Mr. T. Ravichandran Thru Vc, Adv. Mr. K. V. Mohan, AOR Mr. K.v. Balakrishnan, Adv. Mr. Devesh Kr. Khanduni, Adv. Mr. Soumya Dutta, AOR Mr. Siddhant Upmanyu, Adv. Mr. Abhijeet Pandey, Adv. Mrs. Indrani Dey, Adv. Mr. Tapesh Kumar Singh, Sr. Adv. Mr. Prabhat Ranjan Raj, AOR Mr. Anil Kumar, Adv. Mr. Gunjesh Ranjan, Adv. Mr. Amarjeet Gupta, Adv. Mr. Mannoneet Dwidedi, Adv. Mr. Abhishek Kumar, Adv. Mr. Prakash Kumar Mangalam, Adv. Mr. Prabhat Kaushik, AOR Mr. Venkata Subramanian, Adv. Mr. Prabhat Kaushik, Adv. Mr. Paramvir Singh Narang, Adv. Mr. Vinay Tomar, Adv. Ms. Pratibha Kaushik, Adv. Ms. Harshita Lulla, Adv. Ms. Shruti Jangid, Adv. Mr. Maneesh Arora, Adv. Mr. Lakhan Singh, Adv. M/S. Dua Associates, AOR Mr. Samar Vijay Singh, AOR Mr. Shashwat Parihar, Adv. Ms. Sabarni Som, Adv. Mr. Keshav Mittal, Adv. Mr. Aman Dev Sharma, Adv. Mr. Gaj Singh, Adv. Mr. Amit Ojha, Adv. Mr. Azeem A Dost, Adv. Mr. Prashant Sharma, Adv. Mr. Mayank Sapra, Adv. Mr. Snehasish Mukherjee, AOR Mr. Sulaiman Bhimani, Adv. Ms. Lalima Das, Advocate General Mr. Brijesh Kumar Tamber, AOR Mr. Rajesh Kumar Gautam, AOR Mr. Anant Gautam, Adv. Mr. Deepanjal Choudhary, Adv. Mr. Vibhu Sharma, Adv. Ms. Likivi Jakhalu, Adv. Mr. Aman Gahlot, Adv. Mr. Rishi Chauhan, Adv. Ms. Azal Aekram, Adv. Ms. Pallavi Pratap, AOR Mr. Amjid Maqbool, Adv. Ms. Prachi Pratap, Adv. Dr. Prashant Pratap, Adv. Ms. Yashvi Aswani, Adv. Ms. Anupriya Dixit, Adv. Mr. Ashish Aggarwal, Adv. Ms. Ramya Aggarwal, Adv. Ms. Tanya Aggarwal, Adv. Mr. Vinayak Mehrotra, AOR Mr. Kaushik Poddar, AOR Mr. Siddharth Sharma, AOR Ms. Ishika Chauhan, Adv. Mr. B. K. Satija, AOR Mr. Shashwat Anand, AOR Mr. Rishab Kumar, Adv. Mr. Shashank Singh, Adv. Mr. Kanishk Khetan, Adv. Mr. Dharampal Singh, Adv. Mr. Prem Sagar Keshri, Adv. Mr. Mayank Rajan Joshi, Adv. Mr. Pankaj Bhagat, AOR Mr. Ravi S Gupta, Adv. Ms. Dolly Nair, Adv.
The court established that simultaneous CIRP can be initiated against a principal debtor and its guarantor under the Insolvency and Bankruptcy Code, maintaining the creditor's right to full claim without unjust enrichment.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Corporate Insolvency Resolution Process (CIRP) - Simultaneous proceedings against principal debtors and corporate guarantors are maintainable - The principle of co-extensive liability between debtor and guarantor is central in guarantee contracts. (Paras 28, 73, 78 and 105)
(B) The applications for initiation of CIRP filed against the principal borrower and its corporate guarantor are independent, and the creditor’s ability to claim against both does not constitute unjust enrichment. (Paras 80-90)
Facts of the case:
These appeals concern simultaneous initiation of CIRP against different corporate entities arising from the same debt obligations with claims filed by creditors against both the principal debtor and its guarantors, challenged based on prior judgments. (Paras 1-4)
Findings of Court:
The Court affirmed the legality of simultaneous proceedings under the IBC against both corporate debtors and guarantors while emphasizing that a creditor can pursue claims without being restricted to one source unless an amendment is made to law explicitly barring such actions. (Paras 105-109)
Issues: The main issues involve whether simultaneous CIRP against corporate guarantors and debtors is permissible under the IBC and what safeguards prevent unjust enrichment in such proceedings. (Paras 2, 90)
Ratio Decidendi: The court ruled that the co-extension of liability between principal debtors and guarantors in contractual agreements permits simultaneous CIRP initiation, provided the claims do not exceed the owed amounts to creditors. (Paras 26-29, 80-90)
Result: Appeals allowed in some instances, others dismissed.
Judgement Key Points
Yes, simultaneous proceedings for Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC) against a principal debtor and its corporate guarantor (or vice versa) are maintainable. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
Key Reasons from the Judgment:
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Statutory Provision: Section 60(2) of the IBC expressly permits applications for insolvency resolution against a corporate guarantor to be filed before the same National Company Law Tribunal (NCLT) where proceedings against the principal debtor are pending, enabling simultaneous handling. (!) (!) (!) (!) (!)
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Co-extensive Liability: Under principles of guarantee, the guarantor's liability is co-extensive with the principal debtor's, allowing a financial creditor to proceed against either, both, or simultaneously without needing to elect one over the other. (!) (!) (!) (!) (!)
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Not Barred by Prior Claims: Admission of a claim in one CIRP (e.g., against the guarantor) does not preclude initiating CIRP against the other (principal debtor), as proceedings are independent. (!) (!) (!) (!)
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Safeguards Against Issues:
- No Double Recovery: Regulation 12A requires creditors to update claims if satisfied partly or fully from another source; Resolution Professionals must revise claims accordingly. [p_12A] (!) (!) (!) (!) (!)
- No Election Required: The IBC lacks any mandate for splitting or electing claims; imposing one would undermine guarantee purposes and the "clean slate" principle. (!) (!) (!) (!) (!) (!)
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Discretionary Admission: NCLT examines default and enforceable debt but cannot reject solely to prevent perceived recovery motives. (!) (!) (!) (!)
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Outcome in Appeals: Appeals rejecting simultaneous CIRP were allowed (e.g., setting aside NCLT orders relying on prior precedents), while those permitting it were upheld, affirming maintainability. (!) (!) (!)
This aligns with the IBC's objectives of timely resolution, asset maximization, and creditor rights, without converting proceedings into pure recovery tools. (!) (!) (!) (!)
Legal Category Hierarchy
- insolvency and bankruptcy law
- contract law
- practice and procedure
Table of Contents
2. Opponents argue simultaneous proceedings cause double enrichment and excessive voting rights; proponents contend such proceedings are consistent with co-extensive guarantor liability and statutory provisions of the Code. (Para 37 , 41 , 47 , 49 , 51 )
3. The Code envisions concurrent insolvency proceedings against both principal debtors and guarantors; existing regulatory safeguards like claim updates effectively prevent potential unjust or double enrichment for creditors. (Para 68 , 77 , 86 , 99 , 102 )
4. A financial creditor may maintain simultaneous insolvency proceedings against both the principal debtor and the corporate guarantor, as their liabilities are co-extensive under the guarantee contract. (Para 77 , 86 , 90 , 95 )
5. The Court allowed certain appeals setting aside orders that denied simultaneous proceedings, dismissed other appeals, and affirmed that sequential or concurrent insolvency filings are permissible under the Code. (Para 105 , 106 , 107 , 108 )
6. Are simultaneous insolvency resolution proceedings permissible against both a principal corporate debtor and its corporate guarantor?
Yes, the Code permits simultaneous or separate insolvency proceedings against a principal debtor and its guarantor because their liability to the creditor is co-extensive, ensuring the creditor's contractual rights are preserved. (Para 77 , 78 , 86 )
7. Does the doctrine of election bar a creditor from initiating insolvency proceedings against both a debtor and a guarantor?
No, the doctrine of election does not apply because there is no inconsistency between the remedies of initiating proceedings against the debtor and the guarantor, and the Code contains no restrictive provision mandating such an election. (Para 93 , 95 )
8. How does the legal framework mitigate risks of double enrichment in simultaneous insolvency proceedings?
Risks of double enrichment are mitigated by existing regulations requiring creditors to update their claims if satisfied from other sources, and the duty of the Resolution Professional to independently verify, estimate, and revise admitted claim amounts to reflect any real-time recoveries. (Para 97 , 98 , 99 )
JUDGMENT :
DIPANKAR DATTA, J.
| I. | Introduction |
| II. | The impugned orders |
| A. Impugned order in Civil Appeal No. 6094 of 2019 | |
| B. Impugned order in Civil Appeal No. 6093 of 2019 | |
| C. Impugned order in Civil Appeal Nos. 827-828 of 2021 | |
| D. Impugned order in Special Leave Petition No. 21778 of 2019 | |
| E. Impugned order in Civil Appeal No. 40 of 2020 | |
| F. Impugned order in Civil Appeal No. 2715 of 2020 | |
| G. Impugned order in Civil Appeal No. 4018 of 2023 | |
| H. Impugned order in Civil Appeal No. 7231 of 2024 | |
| III. | Submissions by Counsel |
| A. Submissions opposing simultaneous proceedings | |
| B. Submissions in support of simultaneous proceedings | |
| IV. | Analysis |
| A. History of laws relating to insolvency, reconstruction, recovery of dues, etc. and the objects/purposes of the IBC | |
| B. Re: simultaneous proceedings | |
| C. Re: IBC as recovery proceedings | |
| D. Re: Election of Claims | |
| E. Re: double enrichment | |
| F. The need for reform | |
| V. | Conclusion |
I. INTRODUCTION
The Judge is not to innovate at pleasure. He is not a knight errant roaming at will in pursuit of his own ideal of beauty or of goodness. [Eera v. State (NCT of Delhi), (2017) 15 SCC 133 (Nariman, J. quoting Cardozo, Nature of Judicial Process, p. 141]
1. These appeals, arising out of different orders of the National Company Law Appellate Tribunal2 [NCLAT] and the National Company Law Tribunal3 [NCLT] raise a common question of law; one which would appear to be well settled, yet, has been canvassed before us in its entirety.
2. The issue, at large, is, whether simultaneous proceedings for Corporate Insolvency Resolution Process4 [CIRP] under the Insolvency and Bankruptcy Code, 20165 [IBC or Code, used interchangeably] against the principal debtor as well as its corporate guarantor, or vice-versa, are maintainable?
3. It would seem, as has been mentioned earlier, that the issue stands squarely covered by a decision of this Court in BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd. and Another , (2025) 1 SCC 456. However, since elaborate arguments were advanced spanning over a couple of days, covering a wide array of arguments, we have considered the matter in some depth.
4. It is also imperative to mention, in all fairness to learned senior counsel/counsel for either side, that we are not tasked with assessing the correctness of BRS Ventures Investments Ltd. (supra). The submissions have been made, and so does this judgment proceed, on the premise of the law as it stands to-date. Thus, being bound by Article 141 of the Constitution, we proceed to analyze the facts and submissions in view of the law laid down by this Court so far and render our opinion touching the points raised.
II. THE IMPUGNED ORDERS
A. IMPUGNED ORDER IN CIVIL APPEAL NO. 6094 OF 2019
5. In the lead appeal, the order impugned has been passed by the NCLT, Principal Bench, Delhi dated 7th May 2019. Appellant herein, ICICI Bank7 [ICICI] sought initiation of CIRP as the Financial Creditor against the respondent, ERA Infrastructure (India) Limited, the Corporate Debtor.
6. ICICI had advanced loans to group/related companies of Era Infra Engineering Private Limited, namely, the respondent i.e. ERA Infrastructure (India) Limited, Hyderabad Ring Road Project Private Limited, Apex Buildsys Limited, Dehradun Highway Projects Limited, Gwalior Bypass Project Limited. For the credit facilities granted to these companies, the parent company, Era Infra Engineering Private Limited, gave certain guarantees and contractual comforts.
7. Of these group companies, ERA Infrastructure (India) Limited, the respondent, was sanctioned a loan of Rs. 300 crore by a Credit Arrangement Letter8 [CAL] which was subsequently reduced to Rs. 200 crore. Era Infra Engineering Private Limited entered into an arrangement9 [Loan Purchase Agreement] with ICICI wherein, upon occurrence of a default by ERA Infrastruct
