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CS Professional · Insolvency and Bankruptcy - Law and Practice · Cross Border Insolvency (Elective 7.5)

A personal guarantor's bankruptcy proceeding is pending before a civil court, while the CIRP of the principal corporate debtor, Sahyadri Infra Ltd, is pending before the NCLT having jurisdiction over Sahyadri's registered office. What is the effect under Section 60(3)?

The personal guarantor's bankruptcy proceeding stands transferred to the NCLT dealing with Sahyadri Infra's CIRP. Section 60(3) provides this transfer for proceedings pending in any court or tribunal, and it operates by law without needing the guarantor's consent or any refiling.

  1. AThe guarantor's proceeding stands transferred to the Adjudicating Authority dealing with Sahyadri's CIRPCorrect
  2. BThe civil court continues and the NCLT is barred from hearing the guarantor
  3. CThe guarantor's proceeding is dismissed and must be refiled before the NCLAT
  4. DThe proceeding is transferred only if the guarantor consents

Explanation

Section 60(3) provides that an insolvency resolution process or liquidation or bankruptcy proceeding of a corporate or personal guarantor pending in any court or tribunal stands transferred to the Adjudicating Authority dealing with the corporate debtor's process. The transfer is automatic and needs no consent, and nothing is dismissed.

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