NCLT admits SBI insolvency plea against Anil Ambani

A bench comprising Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar commenced the insolvency resolution process against Ambani and imposed a moratorium on all debts for 180 days or until an order is passed on a repayment plan, whichever is earlier. The tribunal also directed resolution professional Prashant Jain to issue a public notice within seven days inviting claims from creditors.

The case relates to credit facilities of Rs 565 crore and Rs 635 crore sanctioned by SBI to Reliance Communications and Reliance Infratel, respectively, in 2016. Ambani had executed personal guarantees for the loans. SBI invoked the guarantees in January 2018 following defaults by the companies and subsequently moved the NCLT in March 2020 under Section 95 of the Insolvency and Bankruptcy Code.

Rejecting Ambani’s contention that the guarantees were void because the loan accounts were retrospectively classified as non-performing assets, the tribunal held that the subsequent NPA classification could not invalidate the guarantees. It also rejected the argument that approval of the RCom resolution plan had extinguished SBI’s rights against the personal guarantor, noting that lenders’ rights under personal guarantees had been expressly preserved.

Responding to the order, a spokesperson for Ambani said the matter relates to a “disputed personal guarantee” allegedly extended to SBI in 2016 and that Ambani derived no personal benefit from the underlying loan facility. The spokesperson said the order would be reviewed by Ambani’s legal team and challenged through appropriate legal remedies. “Ambani remains confident of vindicating his position before the appropriate forums,” the statement said.