The Supreme Court has held that a promoter’s undertaking to arrange for the infusion of funds into a borrowing company to ensure compliance with financial covenants does not constitute a “Contract of Guarantee” under Section 126 of the Indian Contract Act, 1872. Consequently, such an undertaking cannot be the basis for initiating Corporate Insolvency Resolution
Undertaking to Infuse Funds Not a ‘Guarantee’ Under Contract Act; Resolution Plan Approval Does Not Ipso Facto Extinguish Third-Party Liability: Supreme Court
