BackAnil Ambani moves Delhi HC against appointment of RP in personal bankruptcy plea
In his petition, Ambani challenged the validity of the section pertaining to personal guarantee, bankruptcy and whether there is any enabling provision in the Insolvency Bankruptcy Code (IBC) for such an order
PremiumMUMBAI : Anil Ambani on Wednesday moved the Delhi high court against the appointment of a resolution professional (RP) on personal guarantee given by him against a loan taken by Reliance Communications Ltd (RCom) and Reliance Infratel Ltd (RITL) from State Bank of India (SBI).
Ambani has challenged the validity of the section pertaining to personal guarantee and bankruptcy and asked whether there is any enabling provision in the Insolvency and Bankruptcy Code (IBC) for such an order, two lawyers aware of the matter said on condition of anonymity.
An email sent to a spokesperson for Ambani was not answered immediately.
The matter pertains to Ambani giving a personal guarantee while securing the loans of ₹1,195 crore for RCom and RITL in August 2016 from SBI. However, the firms defaulted in January 2017, resulting in the accounts being declared non-performing assets.
In March this year, SBI filed a petition with the Mumbai bench of the National Company Law Tribunal (NCLT) under section 95 of IBC for personal bankruptcy based on the guarantees issued by Ambani. Whenever an application is filed under section 94 or 95, NCLT has to direct the Insolvency and Bankruptcy Board of India, within seven days of the application, to nominate a RP.
The NCLT order said there is no doubt that Ambani furnished his personal guarantee for the credit facility availed by RCom and RITL. “The authority accordingly has no other option than to issue the direction," said the order on 20 August. It then appointed Jitender Kothari as the RP.
The petition in the Delhi high court is on two grounds, said one of the lawyers mentioned above. “The petition challenges the validity of the section that led to the appointment of the RP and whether there is any enabling provision in the IBC that can lead to passing such an order," he said.
The second lawyer said that Ambani would also take the aid of an 8 August order passed on personal guarantees passed by the Delhi high court.
One of the personal guarantors, Lalit Kumar Jain, had moved Delhi high court seeking that the personal insolvency proceedings should be stayed. His petition on 8 August had said the personal bankruptcy proceedings under IBC was ultra vires, meaning beyond legal authority and power.
The high court ruled that the insolvency proceeding against Jain remains stayed but the liability of the petitioner, the personal guarantor, may also be examined by the RP
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