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Insolvency Resolution Passed Against Anil Ambani

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In the case of State Bank of India (SBI) vs Anil Dhirajlal Ambani, the National Company Law Tribunal (NCLT), Mumbai decided to appoint an insolvency resolution process in a Rs 1200 crore case filed by SBI. The financial creditor filed the application against the respondent seeking urgent hearings and orders under section 97(3) of IBC. However, in this case, the respondent i.e. Anil Dhirajlal Ambani was a guarantor of the corporate debtor.

Facts of the Case

Reliance Communication Limited (RCOM) around 2015-16 approached State Bank of India (SBI) for a credit facility of Rs 565,00,00,000 (Five Hundred and Sixty-Five Crore) to repay some pre-existing debts. Another company named Reliance Infratel Limited (RITL), sister concerns also approached SBI for a credit facility of Rs 635,00,00,000 (Six Hundred and Thirty-Five Crore) for repayment of financial indebtedness. The respondent here provided a personal guarantee under a personal guarantee deed dated 23.09.2016 in favor of the financial creditor. Both, i.e. RCOM and RTIL committed defaults around January 2017 and due to it the accounts of both the companies were declared as non-performing accounts from 26.08.2016. Due to default in payments, the financial creditor on 31.01.2018 invoked a personal guarantee and issued an invocation notice. The applicant finally filed an application on 12th March 2020 but due to COVID 19, the matter could not be listed.



  1. The appellant contended that suspension of the proceedings would be anathema to the scheme of IBC. 
  2. Section 60(2) of IBC has provided that proceedings against the personal guarantor can be filed simultaneously.
  3. The appellant stated the case of Maharashtra State Electricity Board vs Official Liquidator wherein the Hon’ble court stated that “a discharge which the principal debtor may secure by operation of law in bankruptcy or liquidation proceedings in the case of a company does not absolve the surety of his liability.” 
  4. The Hon’ble court in the above-mentioned case gave a principle wherein it clearly stated that even if the principal debtor goes into liquidation, it would not discharge the liability of the personal guarantor. 


  1. The personal guarantee could only be invoked when there has been a shortfall in the recovery of the amount in the credit settlement.
  2. The same was replied in the reply to the letter dated 13.03.2019 wherein the respondent clearly stated that the personal guarantee would not be invoked until the other guarantees have not been invoked. 
  3. The respondent contended that “in all fairness, the applicant should realize and recover the amounts under CIRP from both the companies and if not received then should proceed for the personal guarantor.” 
  4. The debts of RCOM were likely to be in the realization process, therefore no action against the personal guarantor.
  5. The resolution plans for the corporate debtors were pending and it would be prudent not to proceed against the respondent.  

Court’s Analysis

  • Notwithstanding the pendency of resolution plans the personal guarantor can still be proceeded against under section 60(2) read with sections 95 and 97(3) of IBC.
  • Their law has never envisaged that resolution against a personal guarantor can only be followed only when the process of corporate insolvency resolution has ended.
  • Whenever any case is filed under section 95 of IBC, the adjudicating authority shall anyhow within the period of 7 days direct the board to nominate a resolution professional for the insolvency resolution process.
  • Debt and default have remained undisputed, the incongruity of the declaration of NPA has not been raised and contested by the Respondent. Besides, the reappraisal of the declaration of the NPA by this Authority would not fall within the ambit of the provisions of the Code, under which the instant Applications have been made.” 

Court’s Judgment

Mr. Jitendra Kothari (IBBI/IPA-001/IP-P00540/2017-2018/10965) was appointed as the resolution professor under section 97(4) of IBC read with rule 8 of I & B Rules, 2019. Further, the applicant shall take necessary actions under rule 9. is now on Telegram. Follow us for regular legal updates and judgments from the court. Follow us on Google News, InstagramLinkedInFacebook & Twitter. You can also subscribe to our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

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