Thu. Mar 28th, 2024
Anil AmbaniThe Hans India

Synopsis: NCLT allowed the initiation of bankruptcy proceedings against Anil Ambani in lieu of Rs 1,200 crore owing to the State Bank of India.

The National Company Law Tribunal’s (NCLT) of Mumbai bench has appointed Jitender Kothari as the Resolution Professional  to investigate the petition by State Bank of India ( SBI) against Anil Ambani, chairman of Reliance Communications (RComm), filed over his firm’s Rs 1,200 crore personal guarantee to the lender.

State Bank of India
Dialabank

The case relates to the credit facilities SBI offered to RComm and Reliance Telecom Infrastructure Ltd (RTIL) in 2016.

NCLT noted that both RCOM and RITL committed repayment defaults in and around January 2017. The accounts were classified as Non-Performing Account (NPA) retrospectively with effect from 26.08.2016 according to the Risk-Based Monitoring within the year 2017. However, the order added that such a retrospective declaration is rather incongruous, analogous to the adage ‘placing the cart before the horse.’ Though debt and default remained unquestioned, the Respondent did not lift and dispute the incongruity of NPA’s declaration. Therefore, re-evaluation of this Authority ‘s declaration of the NPA does not come under the limits of the provisions of the Code, in which the instant Applications have been made.

The court noted that Section 60(2) of the Code allows for the simultaneous filing of proceedings against personal guarantors, holding that it is incorrect to conclude that no action can be taken before a resolution plan is approved. It even added that the section specifically allows for the commencement of proceedings against specific guarantors running parallel to the CIRP. Fallacious in assuming that no action will be taken against guarantors until the Resolution Plan is approved.

In August 2016, SBI told NCLT that the lender issued loans worth Rs 565 crore and Rs 635 crore to Reliance Communications and RTIL, respectively. Anil Ambani issued a personal guarantee for the products in September 2016, availing the credit facility.

However, since Aug 2016, the RComm and RITL accounts have collapsed in default, retrospectively. The lender invoked the personal guarantee given out by Anil Ambani in January 2018.

Anil Ambani told NCLT that economic and business conditions forced Rcomm and RITL to default in repayments.

An Anil Ambani spokesperson told that the group was evaluating NCLT’s order and taking advice on filing an appropriate appeal against RP appointment. He further mentioned that NCLT order guiding RP appointment will not constitute acceptance of SBI’s demand, adding that the professional resolution would investigate SBI’s plea for insolvency against Anil Ambani and send a report to NCLT.

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