SBI moves SC to vacate stay on recovering dues from Anil Ambani by invoking personal guarantee

Mumbai: State Bank of India has moved the apex court to recover dues from Anil Ambani by invoking his personal guarantee after he got a stay from Delhi High Court against such a move, three people aware of the development said.“Since it was an order by the division bench of the Delhi High Court, the bank has now approached the Supreme Court for relief,” said an executive aware of the matter.SBI didn’t respond to queries and neither did a representative of Anil Ambani. The SBI plea seeking vacation of the stay has been filed through advocate Sanjay Kapur while Ambani is being represented by advocate EC Agrawala.A division bench of the high court led by justice Vipin Sanghi had on August 27 stayed a Mumbai bankruptcy tribunal order.‘Far-reaching Implication’The tribunal had appointed interim resolution professional (IRP) Jitender Kothari to assess Ambani’s assets and liabilities and take a call on the petition filed by SBI to recover dues worth Rs 1,200 crore. The lender said Ambani had personally guaranteed loans taken by Reliance Communications (RCom), currently undergoing bankruptcy resolution. In the special leave petition (SLP) filed by SBI, Ambani, the Ministry of Law & Justice, the Ministry of Corporate Affairs, the Insolvency and Bankruptcy Board of India and IRP Kothari have been made respondents. The SLP was filed on Thursday and registered on Friday.77942051“This case will be watched not only because Anil Ambani is involved but also because it involves a challenge to the constitutional validity of the personal guarantee in the Insolvency and Bankruptcy Code (IBC),” said Suruchi Suri, partner at law firm Suri & Co. “It will be interesting to see the outcome of these proceedings and the Supreme Court's view on the personal guarantor in insolvency proceedings, which will lay to rest any ambiguity on the issue.”In March, SBI had moved the bankruptcy tribunal invoking the personal guarantee clause under the IBC. The law allows lenders to ask the tribunal to appoint an IRP to assess the assets and liabilities of the guarantor.Ambani had said in June that the loans were not personal borrowings. The proceedings initiated by SBI “arose out of a guarantee given for a loan which was availed of by Reliance Communications and Reliance Infratel in 2016 to repay the debts of Chinese and certain other Indian banks”, Ambani told the annual general meeting of his Reliance Group companies on June 23.“The Delhi High Court Order has carefully taken into consideration whilst staying the proceedings against personal guarantors wherein the proceedings against corporate debtor shall remain unaffected,” said Priyanka Sinha, partner at law firm A&P Partner. “In the interim, the court has also taken precautions that the assets of the personal guarantor are not alienated…This order will have a far-reaching implication.”RCom had filed for bankruptcy last year. In August last year, lenders submitted claims of around Rs 49,000 crore. In March this year, the SBI board approved a resolution plan for RCom that envisaged lenders recovering around Rs 23,000 crore, or less than half of their outstanding loans. RCom owes nearly Rs 5,000 crore to SBI.

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