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SC Rejects SBI Plea Seeking Vacation Of Stay On Insolvency Proceedings Against Anil Ambani

Sanya Talwar
17 Sep 2020 12:59 PM GMT
SC Rejects SBI Plea Seeking Vacation Of Stay On Insolvency Proceedings Against Anil Ambani
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The Supreme Court has declined to vacate a stay, earlier granted by Delhi High Court towards the ongoing IBC proceedings against Reliance Group Chairman Anil Ambani.A bench of Justices L Nageswara Rao, Hemant Gupta & S. Ravindra Bhat asked the petitioner bank (State Bank of India) to complete proceedings before the High Court and seek modification as prayed for, adding that the case...

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The Supreme Court has declined to vacate a stay, earlier granted by Delhi High Court towards the ongoing IBC proceedings against Reliance Group Chairman Anil Ambani.

A bench of Justices L Nageswara Rao, Hemant Gupta & S. Ravindra Bhat asked the petitioner bank (State Bank of India) to complete proceedings before the High Court and seek modification as prayed for, adding that the case will be taken up before the Delhi High Court on October 6.

Senior Advocate Harish Salve appearing for the Bank told the court that though Part III had been stayed in 8 petitions, they've filed the SLP only in this one case.

The plea comes in light of the an order passed by the Delhi High Court staying the IBC proceedings against Ambani in terms of an INR 1200 crore loan, disbursed by SBI to two of Ambani's firms.

The SBI invoked personal guarantee in terms of the same but a Division Bench of Justice Vipin Sanghi and Justice Rajneesh Bhatnagar restricted Anil Ambani from alienating his assets till the next date of hearing.

Before the Delhi High Court, the plea was moved by Anil Ambani challenging the appointment of a Resolution Professional for a personal guarantee given by him for loans taken by Reliance Communications Ltd (RCom) and Reliance Infratel Ltd (RITL) from the State Bank of India.

The Delhi High Court had issued notice in the petition and went on to stayed the proceedings initiated against him under Part III of the Insolvency & Bankruptcy Code.

The court also observed that IBC proceedings against the corporate debtors shall continue.

The order has come in a plea moved by Anil Ambani against the appointment of a Resolution Professional (RP) on personal guarantee given by him against a loan taken by Reliance Communications Ltd (RCom) and Reliance Infratel Ltd (RITL) from State Bank of India (SBI).

In addition to this, Ambani has also challenged the validity of the provision regarding the personal guarantee and bankruptcy by arguing that there is no enabling provision in the Insolvency and Bankruptcy Code (IBC) for such an order.

Ambani is aggrieved by the order passed by theNational Company Law Tribunal, Mumbai Bench on August 20 wherein it is stated that:

'there is no doubt that Ambani furnished his personal guarantee for the credit facility availed by RCom and RITL… The authority accordingly has no other option than to issue the direction.'

Ambani had given a personal guarantee for the loans taken by RCOM and RITL in tune of Rs 1195 crore from the State Bank of India. In 2017, the said firms defaulted on payment which resulted in their loan accounts being declared as Non Performing Assets (NPA).

In March 2020, SBI had filed a petition before the Mumbai bench of the National Company Law Tribunal (NCLT) under section 95 of IBC for personal bankruptcy based on the guarantees issued by Ambani. Under sections 94 or 95 of the IBC, whenever a petition is moved in this regard, NCLT has to direct the Insolvency and Bankruptcy Board of India, within seven days of the application, to nominate a RP.

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