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With Anil Ambani as the personal guarantor, RCOM and RITL had taken credit facility to the tune of Rs. 565 crores and Rs 635 crores respectively, from SBI.
The Delhi High Court today stayed the personal insolvency proceedings against Chairman of the Reliance ADA Group, Anil Ambani, under Part III of the Insolvency & Bankruptcy Code and directed him to not transfer and dispose of any assets. (Anil Ambani vs CBI & Ors)
A Divison Bench of Justices Vipin Sanghi and Rajnish Bhatnagar passed the order in Anil Ambani's petition challenging the vires of the provisions pertaining to personal insolvency against personal guarantors under Part III IBC.
Notice in the petition was issued to State Bank of India, Central Government and Insolvency & Bankruptcy Board of India.
With Anil Ambani as the personal guarantor, Reliance Communications Limited (RCOM) and Reliance Infratel Limited (RITL) had taken credit facility to the tune of Rs. 565 crores and Rs 635 crores respectively, from SBI.
While clarifying that the corporate insolvency resolution process against Anil Ambani's RCOM and RITL shall continue as before, the Court added that the extent of his liability as personal guarantor in the loans can be examined by the Resolution Professional in those proceedings.
Senior Advocate Harish Salve appeared for Anil Ambani.
Stay on proceedings under Part III was strongly opposed by Senior Advocate Neeraj Kishan Kaul for SBI and Additional Solictor General Madhavi Divan.
While ASG Divan argued that a stay would lead to several other similarly placed personal guarantors to stall proceedings under IBC, Senior Advocate Kaul contended that the object of the petition was to derail the process established under IBC.
Senior Advocate Kaul stated that their application under Part III was yet to be admitted and at this stage, the jurisdiction of the National Company Law Appellate Tribunal could not be replaced under the garb of a writ petition.
Earlier this month, the National Company Law Tribunal, Mumbai had appointed Resolution Professional in a SBI's application under Section 97(3) IBC qua the personal guarantees extended by Anil Ambani.
Ambani had opposed SBI's application on the ground that the Resolution Plans for the two Corporate Debtors i.e RCOM and RITL were already under consideration and thus, it was prudent not to proceed against the personal guarantor at this point.
In view of the fact that the furnishing of personal guarantee for the credit facilities by Anil Ambani was not in dispute, NCLT had opined that it had no other option but to issue the direction under Section Section 97(3).
The matter would be heard next on October 6.