Abstract

Creditors, in common parlance, can be termed as any legal entity who extends credit by giving the permission to another entity to borrow money with an intention to repay the same in the future. They play a crucial role in keeping the company in a good condition. They are the sole functionaries of the company who give them the credits to maintain their business. By the righteousness of loaning cash by the creditors to the company, the company becomes indebted to them and subsequently is under a commitment to take legitimate consideration of the creditors' enthusiasm. Earlier there were no such establishments that give alleviation to the creditors whose cash is being associated with the company that falls flat. Many times it was also seen that the company, in the wake of taking cash from the creditors, disappeared without restoring the due cash to the creditors. Such acts on part of the companies render misfortune to the creditors. Hence, to regulate such acts and secure the creditors, there are numerous enactments that have been authorized by the Indian Government. These enactmentshave made it feasible for the creditors to guarantee their cash once more from the company. Consequently, in today’s time, a company which cannot reimburse the due sum to the creditors can't take the reason of being wiped out. In this paper, the Author tries to explore the eclectic ways by which security is stood to the creditors of a company and furthermore view the different arrangements that assist the creditors in understanding their credit. The Author further aims to highlight a few judicial remedies and precedents at their aid among which the Swiss Ribbon Case of 2019 is held as a Landmark Citation in the field of company law and insolvency code respectively. For this paper, the Author will be adopting the doctrinal method to proceed with his research work. Primary resources the Author will be referring to in the course of his research work will include books, journals, law reports and cases. Other sources like articles published in online journal and the similar will be accessed online through the use of online databases.

Keywords