The National Company Law Tribunal (NCLT), Mumbai bench has allowed an application filed by State Bank of India to initiate insolvency proceedings against Reliance Communications Chairman Anil Ambani with respect to personal guarantee to the extent of Rs 1200 crores.
SBI filed an application under section 95 of the Insolvency and Bankruptcy Code (IBC), 2016 to initiate personal insolvency proceedings against Anil Ambani in his capacity as a personal guarantor for certain facilities granted to Reliance Communications Limited (RCOM) and Reliance Infratel Limited (RITL) by SBI aggregating to INR 1200 crore.
When the application was filed by SBI for the above mentioned cause, NCLT gave an order for the appointment of a resolution professional and asked SBI to take the necessary follow-up action to submit a report recommending the admission or rejection of the said application.
It advisable under section 97(3) of the IBC, that the Adjudicating Authority is required to direct the Insolvency and Bankruptcy Board of India (IBBI), to nominate a resolution professional for the insolvency resolution process within 7 days from the filing of an application under sec 95 of the IBC. However, due to pandemic, the functioning of the courts were reduced, the Authority could not issue any of these directions as required under law.
At the same time, Ambani was facing trial before High Court of England and Wales wherein a decree was passed against him to repay INR 5450 crores to certain Chinese Banks.
While all these things was going on, SBI filed an interlocutory application seeking urgent direction from Adjudicating Authority to IBBI for nominating professional under sec 97(3) of IBC on the apprehension that Chinese Banks may initiate execution proceedings against Ambani.
However, after hearing the parties, NCLT allowed SBI’s application and appointed an insolvency resolution professional to examine the application under sec 95 of the IBC and submit a report.