Enforceability of explicit clauses reserving creditor rights against third-party security providers

Where a resolution plan sanctioned by the Adjudicating Authority contains explicit provisions preserving the remedies of financial creditors against third parties, including promoters and third-party security providers in respect of unsustainable debt, such reservations are valid, binding, and fully enforceable. The statutory framework of the Insolvency and Bankruptcy Code, 2016 does not dismantle independent contracts of guarantee or mortgage securities created by third parties to secure the corporate debtor's borrowings. Consequently, when an approved resolution plan expressly stipulates that rights against third-party collateral or security providers shall survive the corporate insolvency resolution process, the creditors remain fully entitled to enforce those preserved rights outside the corporate debtor's resolution. (UV Asset Reconstruction Company Limited Vs Electrosteel Castings Limited | 2026 INSC 14)