SC dismisses SBI plea seeking vacation of stay on Anil Ambani bankruptcy case
NEW DELHI: The Supreme Court on Thursday refused to vacate a stay on the personal bankruptcy resolution process initiated against Anil Ambani, chairman of ailing telco Reliance Communications, and instead directed State Bank of India to approach Delhi High Court for any relief.
The High Court on August 27 stayed resolution process initiated by SBI against Ambani in the National Company Law Tribunal on March 13.
The top court las also requested the Delhi High Court to hear a challenge by Ambani to the government’s Insolvency Resolution Process (for Personal Guarantors to Corporate Debtors) Regulations, 2019, as scheduled on October 6.
No adjournment will be taken by any of the parties and pleadings will be completed, it said. In case the matter is not taken up due to some reason, SBI has been given the liberty to pray to the High Court for a variation of the interim stay order.
New regulations on insolvency process, which came into effect from December 1, 2019, had set the stage for lenders to recover loans of defaulting entities from their personal guarantors. The Delhi High Court while staying the resolution process against Ambani had allowed NCLT proceedings against corporate debtors
and Reliance Infratel (RTIL) – which owe 565 crore and 635 crore respectively to SBI – to continue.
“…while dealing with those proceedings, the liability of the petitioner (Ambani) may also be examined by the IRP. However, the proceedings against the petitioner under Part-III of the IBC (Insolvency and Bankruptcy Code) shall remain stayed,” Justices Vipin Sanghi and Rajnish Bhatnagar had said. “We restrain the petitioner 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.”
SBI challenged the High Court stay in the top court.
It argued, through Solicitor General Tushar Mehta and advocate Sanjay Kapur, that the stay would frustrate the new provisions that allow lenders to recover their debts from the personal guarantors of bankrupt companies and urged the top court to lift the stay.
This was opposed by Ambani through senior advocate Harish N Salve who termed the SBI plea “delightful rhetoric”, given that “declaring a person bankrupt had very serious consequences”.
( Originally published on Sep 17, 2020 )