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24.5.21 English Editorials

🛑The Hindu

The Supreme Court judgment upholding creditors’ right to proceed against personal guarantors to loans provided by them to a corporate borrower helps lift the uncertainty over the extent to which banks and other financial lenders can pursue not only the corporate debtor but also the individuals who had furnished personal guarantees to enable the flow of credit to the company they had stood surety for. This ought to be of significant consequence to the financial system, already under a mountain of bad loans, by helping expedite the resolution of such stressed assets. The two-judge Bench was considering a clutch of petitions challenging the government’s 2019 notification that made personal guarantors a separate category of individuals who could be proceeded against under the Insolvency and Bankruptcy Code as part of the insolvency proceedings initiated by lenders against defaulting corporate entities. In dismissing the petitions, the judges made clear that the government was right in “carving out personal guarantors as a separate species of individuals”, given the “intimate connection between such individuals and corporate entities to whom they stood guarantee”. Banks now stand a real chance of recovering substantially more from the resolution of a stressed corporate entity, as in most cases it has been the relatively affluent promoters who have been standing as individual personal guarantors for the loans extended to the companies they promoted.

Several corporate leaders are set to be impacted. The promoters of many defaulting corporates, which are facing action under the IBC, had furnished guarantees for thousands of crores in loans availed by the companies they ran. The State Bank of India alone had submitted in the apex court that it had served demand notices aggregating to more than ₹39,000 crore to individuals who had signed as guarantors for credit provided to corporate entities. The judges also cleared the air over another issue that is bound to strengthen the creditors’ positions in all ongoing, future and even completed insolvency proceedings. The Bench ruled that the approval of a resolution plan for the corporate debtor does not extinguish the personal guarantor’s liability, which it said “arises out of an independent contract”. Lenders can now proceed against the guarantors to enhance recovery given that most banks agree to ‘haircuts’ when negotiating a resolution plan with a new promoter for the defaulting company. The only wrinkle here is that once the resolution plan becomes legally binding, the guarantor loses the recourse to remedy from the borrower when the creditor invokes the personal guarantee. Entrepreneurs will now have to think twice before signing a personal guarantee unless they can be very certain that the business they found will not flounder.


1.A Mountain Of (Phrase)-a very large pile or amount of something.

2.Expedite (V)-to accelerate the process or progress of. शीघ्र

3.Insolvency (N)-a state of financial distress in which a person or business is unable to pay their debts. दिवालियापन

4.Affluent (Adj)-having a lot of money or owning a lot of things. समृद्ध

5.Availed (V)-use or take advantage of (an opportunity or available resource). लाभ उठाना

6.Haircuts (N)-a reduction in the stated value of an asset.

7.Wrinkle (N)-a problem, usually a small one.

8.Flounder (N)-to experience difficulties and be likely to fail. लड़खड़ाना


🛑The second wave of the pandemic has thrown up another serious challenge. Besides, in just about three months, the number of daily cases touching 4.14 lakh on May 6 and cumulative cases crossing 15 million, mortality reaching an all-time peak of 4,529 on May 18 and the total number of deaths reaching nearly 1.5 lakh, there is now a growing number of mucormycosis cases being reported in COVID-19 patients. A concerned Health Ministry has now asked all States to classify mucormycosis, a fungal infection, as a notifiable disease under the Epidemic Diseases Act 1897; a few States have complied. As a notifiable disease, every suspected and confirmed case is to be reported to the State Health Department. While the infection is caused by a group of moulds called mucormycetes, which are commonly found in the environment, the fungi are largely harmless under normal circumstances. But COVID-19 patients with uncontrolled diabetes who are on steroid therapy face a higher infection risk. Breathing in the fungi spores can cause an infection in the lungs or sinuses which can spread. Even when blood sugar is under control, indiscriminate steroid use can cause an increase in blood sugar levels, making such patients more susceptible to mucormycosis infection.

Patients with severe COVID-19 disease tend to develop a systemic inflammatory response leading to lung injury and multisystem organ dysfunction. While WHO “strongly recommends” that corticosteroids such as dexamethasone be used in treating patients with severe and critical COVID-19, they should not be used in non-severe COVID-19 patients. The absence of any new or repurposed drugs to effectively treat COVID-19 patients and the lack of clear guidelines in using certain drugs have led to indiscriminate drug use, including steroids. The rise in mucormycosis infection cases should be a wake-up call for COVID-19 patients and medical practitioners to use steroids judiciously for a limited period and in the right dosage, especially in diabetic patients; self-medication with steroids should be avoided at any cost. Most importantly, in COVID-19 patients with diabetes, controlling blood sugar levels using insulin can help prevent mucormycosis infection. While the availability of Amphotericin-B to treat mucormycosis was limited till recently, five manufacturers in India are in the process of ramping up production. Five more companies have also been licensed to augment supplies. Since the infection presents itself with typical symptoms, timely diagnosis is easy. The infection can be cured without even surgery if detected early. This is one more reason why people, particularly those with diabetes, should get vaccinated soon. Since complete vaccination prevents severe disease, diabetics will not need steroids, and hence will not suffer from mucormycosis.


1.Thrown Up (Phrasal Verb)-to produce new problems or ideas.

2.Cumulative (Adj)-increasing or increased in quantity, degree. बढ़ता हुआ

3.Notifiable (Adj)-denoting something, typically a serious infectious disease.

4.Indiscriminate (Adj)-done at random or without careful judgement.

5.Wake-Up Call (N)-a thing that alerts people to an unsatisfactory situation and prompts them to remedy it.

6.Ramping Up (Phrasal Verb)-increase the level or amount of something sharply. बढ़ाना

7.Augment (V)-to increase the size, amount, or value of something. बढ़ाना



Black fungus: Experts to study causes including industrial oxygen use

Press Trust of India | 24/05/2021 | 5 hours ago

Experts in Karnataka will study whether the rise in the Mucormycosis cases is linked to use of industrial oxygen and its possible contamination.

Deputy Chief Minister C N Ashwath Narayan, who is also the head of the state's COVID task force, held a meeting on Sunday with the treatment protocol committee where the possible sources of the infection were discussed.

Noting that the state has recorded about 700 cases of black fungus infections in the last week, he directed experts to find its source, with doubts being expressed about oxygen supply, quality of piping and cylinders used for it.

Accordingly, a team of microbiologists will start to work towards this from Monday, his office said in a release.

The country used to record about 100 cases of black fungus a year earlier but the state has recorded about 700 cases in the last week. This surge has been the cause of anxiety, Narayan was quoted as saying.

Also, black fungus cases are not spotted in other COVID hit countries, but they are occurring only in India, he said.

Dr Sampath Chandra Prasad Rao, skull surgeon, Manipal Hospital (Bengaluru) made the presentation about mucormycosis at the meeting and felt the probable reasons for the surge in black fungus may be contamination, either due to low-quality cylinders or low-quality piping system at the ICU level in hospitals.

It may also be caused because of contamination at the industry level from where the oxygen is being supplied or due to low standard of sterilization or any other such reasons.

Suspicion was raised that it may be due to usage of ordinary tap water in ventilators, Rao said.

"To meet the rise in demand, industrial oxygen is being procured in large quantity and questions have been emanated, about, whether the oxygen supplied from industries matches with the quality of medical oxygen or not. This could also be one of the reasons," he said.

The Deputy Chief Minister asked the microbiologists to record the clinical history of the patient affected by mucormycosis and to do the data analytics.

Simultaneously, he has also instructed them to study the source of oxygen supply at the hospital, quality of piping and cylinders and quality of water used for ventilators, and also quality at the source point of supply at the industry/plant level.


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