The Supreme Court on Thursday dismissed State Bank of India's (SBI's) plea seeking the vacation of a stay granted by the Delhi High Court on bankruptcy proceedings against Reliance Communications (RCom) Chairman Anil Ambani.
Ambani had earlier objected to the SBI invoking personal guarantees under the Corporate Debtors Regulations, 2019.
In late August, the Delhi High Court had put on hold the insolvency resolution process (IRP) proceedings against Anil Ambani in relation to the recovery of Rs 1,200 crore loans given by SBI to his two firms. Ambani had given personal guarantees for the Rs 565 crore and Rs 635 crore SBI loans to RCom and Reliance Infratel (RITL), respectively, in August 2016.
The order came after new rules became applicable against the personal guarantors given to loans above Rs 1,000 crore or more by promoters. Till November, the IBC only covered Indian companies and not promoters. In its petition to the SC, SBI said several promoters have moved the Delhi High Court after their personal guarantees have been invoked.
Ambani in his plea in the Delhi High Court had challenged the constitutionality of the IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019.
While the personal guarantee matter is being heard by the apex court, the fate of dues worth Rs 45,000 crore, including to the Chinese banks, will be decided by the NCLT where the matter is still pending.
The National Company Law Tribunal (NCLT) on August 20 had directed the initiation of insolvency proceedings against Ambani under the personal guarantee clause of the bankruptcy law. It had ordered the appointment of a resolution professional and asked SBI to take the necessary action.
The NCLT had also said both RCom and RITL committed default in repayment in and around January 2017. The accounts were retrospectively declared as a non-performing account with effect from August 26, 2016, even before loan agreements had been entered into.
On September 7, the SBI also invoked the personal guarantees of Sanjay Singal, promoter of Bhushan Power & Steel, as the company defaulted to loans worth Rs 48,000 crore. The debt resolution of the company is almost ready in the NCLT, with JSW Steel declared the highest bidder with a Rs 19,700-crore offer. The matter is currently pending in the SC after JSW Steel sought its intervention on not holding the firm liable for any criminal acts of the previous promoter.