Delhi high court on Thursday stayed personal bankruptcy proceedings against Anil Ambani, chairman of Reliance Group, even as it restrained him from selling or transferring any of his personal assets.
The stay order comes as a relief for Ambani, who had moved the high court on Wednesday against the appointment of a resolution professional (RP) on personal guarantees given to State Bank of India (SBI) for securing corporate loans.
Ambani had challenged the validity of the section pertaining to personal guarantee and asked if there is any enabling provision in the Insolvency Bankruptcy Code (IBC) for such an order.
“The proceedings would continue in relation to the corporate debtor (companies) and 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 shall remain stayed,” the order said.
SBI had lent ₹1,195 crore to Reliance Communications Ltd (RCom) and Reliance Infratel Ltd (RITL) in 2016, with Ambani standing as personal guarantor for the loan. However, both RCom and RITL defaulted. SBI in March filed an application against Ambani for insolvency under part III of IBC rules, which pertain to application for insolvency proceedings for personal guarantors to the corporate debtor.
A division bench of justice Vipin Sanghi and justice Rajnish Bhatnagar on Thursday said proceedings against the corporate debtors will continue and issued notice to the central government, SBI and others.
The matter will be heard next on 6 October.
An email sent to a spokesperson for Ambani remained unanswered till press time.
The National Company Law Tribunal under section 95 of IBC for personal bankruptcy against Ambani on 20 August declared that he did furnish his personal guarantee for the loans, and appointed Jitender Kothari as RP.
The Thursday order is on the basis of an 8 August stay order passed by the Delhi HC, in a case where a businessman and a personal guarantor had said personal bankruptcy proceedings under IBC was ultra vires.
Senior advocate Neeraj Kaul appearing for SBI argued the two cases are different. “Today, if the lordship will stay part three of the IBC proceedings, then automatically, CIRP (corporate insolvency resolution process) comes to a stay,” said Kaul.
News Source: Livemint