– ‘One Debt, Two Insolvencies: Supreme Court Rejects The “One Debt, One CIRP” Rule’, published on Mondaq

Partner, Sharad Joshi along with Managing Associate, Rachit Verma and Associate, Naina Sharma recently authored an insightful article titled, ‘One Debt, Two Insolvencies: Supreme Court Rejects The “One Debt, One CIRP” Rule’.

The Supreme Court’s decision in ICICI Bank Limited & Ors v. Era Infrastructure (India) Limited & Ors. marks a significant development in India’s insolvency jurisprudence by decisively clarifying the permissibility of parallel insolvency proceedings against a principal borrower and its corporate guarantor. Departing from earlier restrictive interpretations, the Court has affirmed that the Insolvency and Bankruptcy Code, 2016 does not impose a “one debt, one CIRP” limitation, thereby reinforcing the co-extensive nature of guarantee obligations. This ruling not only resolves a longstanding ambiguity but also strengthens creditors’ enforcement toolkit, while balancing concerns of procedural fairness through existing safeguards within the insolvency framework.