Delhi HC stays personal insolvency proceeding against Anil Ambani
The Delhi High Court has stayed personal insolvency proceedings against Anil Ambani started by State Bank of India.
The two-judge bench of Vipin Sanghi and Rajnish Bhatnagar in an order on 27 August said that the proceedings against the Anil Ambani under Part-III of the IBC, which deals with personal insolvency, will remain stayed.
However, it allowed proceedings against corporate debtor – Reliance Communications – to continue and said that while dealing with those proceedings, the liability of the petitioner may also be examined by the IRP (insolvency resolution professional,” said the court in its order.
The court restrained the petitioner – Anil Amabni — from transferring, alienating, encumbering, or dealing with, or disposing of any of his assets, or his rights, or beneficial interest therein till the next date.
The high court will next hear the case on 6 October 2020. Anil Ambani was represented by Harish Salve in the court.
The National Company Law Tribunal (NCLT) on 20 August had given its nod to starting individual insolvency proceedings against Anil Ambani for failing to make payments as personal guarantor against loans taken by Reliance Communication and Reliance Infratel. Following this, Ambani moved the high court against the NCLT order.
The case pertains to Rs 1200 crore loan extended by the State Bank of India (SBI) to Anil Ambani-owned Reliance Communication (Rs 565 crore) and Reliance Infratel Ltd (Rs 635 crore) for which Ambani had given personal guarantee.
Both Rcom and RITL had defaulted in January 2017, after which the bank identified the two accounts as NPA retrospectively from August 2016. The bank in January 2018 invoked the personal guarantee and issued notice to Anil Ambani, who failed to make any repayments despite several reminders by the bank.
In the meanwhile on an application by operational creditor Ericson India, NCLT started the insolvency proceedings against Ambani’s firms – Rcom and RTIL.
This is when the State Bank of India thought it would not be able to recover the claim amount from the CIRP or from the borrowers RCOM & RITL, and decided to issue a demand notice on 20 February 2020 in Form-B to the NCLT demanding payment from Anil Ambani. The Notice was not responded to by Ambani, forcing the bank to file a petition under section 95 of IBC requesting initiation of personal insolvency against Anil Ambani.
