Insolvency Resolution Process Appointed Against Anil Ambani by NCLT

Must Read

New Insolvency and Bankruptcy Code (IBC) Amendments Are Valid Says Supreme Court

On Tuesday, the Supreme Court upheld the amendments in the insolvency and bankruptcy code which makes it mandatory for a minimum of 100 or 10% of home buyers of a project to initiate insolvency proceedings against a builder for not delivering flats or commercial shops on time.

[HUL – Sebamed Ad War] Bombay High Court Passed Injunction; Permits Sebamed Ad Against HUL’s Dove

The ad war between the German personal care brand Sebamed and the consumer goods giant Hindustan Unilever Ltd (HUL) has come to an end. On January 19th, Bombay High Court passed an injunction order permitting the Sebamed ad against Hindustan Unilever’s Dove without any changes. It was observed that Sebamed ads were backed with evidence-based data. However, Sebamed was ordered to put an end to its advertisement that compared HUL soap bars Lux, Pears, and Santoor with Rin and detergent category.

Bombay High Court Says White Collar Crimes Are More Dangerous Than Murder and Dacoity

The Aurangabad Bench of the Bombay High Court rejected 4 petitions of 4 businessmen after observing that white-collar crimes are more serious than murder and dacoity. The businesspersons were booked for fraud of evading GST by producing fake invoices.

Right To Protection Can’t Be Granted To Married Woman Involved in Live-in Relationship: Allahabad High Court

The Bench of Allahabad High Court dismissed a petition of a live-in couple, observing that a married woman in a live-in relationship is not entitled to any sort of legal protection whatsoever. The Court remarked that they are adults and should live as ‘husband and wife’ if they want no one to interfere in their lives.

Police To Decide on the Entry of Farmers To Delhi on Republic Day Says Supreme Court

While the Supreme Court heard a plea seeking an injunction against the tractor rally that is scheduled for January 26th, it held that it is the decision of the Delhi Police officers to see whether the protesting farmers should get entry into Delhi on Republic Day.

[Sushant Singh Rajput Case]: Republic TV & Times Now Hindered Investigation Probe Says Bombay HC

In November last year, the Court had reserved its judgement on the PILs that came from 8 former police officers from Maharashtra, lawyers, activists and NGOs, seeking restraining orders against the media trial in the Sushant Singh Rajput case.

Follow us

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 deed dated 23.09.2016 in favour of the financial creditor. Both, RCOM and RTIL committed defaults around January 2017. 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 a petition on 12th March 2020, but due to COVID 19, the matter could not be listed.

Arguments Made by the Parties

Appellant

  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 Liquidatorwherein 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 case mentioned above gave a principle wherein it clearly stated that even if the principal debtor goes into liquidation, it will not discharge the liability of the personal guarantor. 

Respondent 

  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 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.
  • The court further declared that 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.

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.

The Court allowed the applicant to take necessary actions under rule 9. 


Libertatem.in is now on Telegram. Follow us for regular legal updates and judgment from courts. Follow us on Google News, InstagramLinkedInFacebook & Twitter. You can 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.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

New Insolvency and Bankruptcy Code (IBC) Amendments Are Valid Says Supreme Court

On Tuesday, the Supreme Court upheld the amendments in the insolvency and bankruptcy code which makes it mandatory for a minimum of 100 or 10% of home buyers of a project to initiate insolvency proceedings against a builder for not delivering flats or commercial shops on time.

[HUL – Sebamed Ad War] Bombay High Court Passed Injunction; Permits Sebamed Ad Against HUL’s Dove

The ad war between the German personal care brand Sebamed and the consumer goods giant Hindustan Unilever Ltd (HUL) has come to an end. On January 19th, Bombay High Court passed an injunction order permitting the Sebamed ad against Hindustan Unilever’s Dove without any changes. It was observed that Sebamed ads were backed with evidence-based data. However, Sebamed was ordered to put an end to its advertisement that compared HUL soap bars Lux, Pears, and Santoor with Rin and detergent category.

Bombay High Court Says White Collar Crimes Are More Dangerous Than Murder and Dacoity

The Aurangabad Bench of the Bombay High Court rejected 4 petitions of 4 businessmen after observing that white-collar crimes are more serious than murder and dacoity. The businesspersons were booked for fraud of evading GST by producing fake invoices.

Right To Protection Can’t Be Granted To Married Woman Involved in Live-in Relationship: Allahabad High Court

The Bench of Allahabad High Court dismissed a petition of a live-in couple, observing that a married woman in a live-in relationship is not entitled to any sort of legal protection whatsoever. The Court remarked that they are adults and should live as ‘husband and wife’ if they want no one to interfere in their lives.

Police To Decide on the Entry of Farmers To Delhi on Republic Day Says Supreme Court

While the Supreme Court heard a plea seeking an injunction against the tractor rally that is scheduled for January 26th, it held that it is the decision of the Delhi Police officers to see whether the protesting farmers should get entry into Delhi on Republic Day.

[Sushant Singh Rajput Case]: Republic TV & Times Now Hindered Investigation Probe Says Bombay HC

In November last year, the Court had reserved its judgement on the PILs that came from 8 former police officers from Maharashtra, lawyers, activists and NGOs, seeking restraining orders against the media trial in the Sushant Singh Rajput case.

Women Advocates Move To Supreme Court Against the Delhi HC Orders on Resuming Physical Hearing

Another writ petition has been filed by women advocates in the Supreme Court against the decision of the Delhi HC of directing the expansion of physical hearing of cases within the National Capital Territory of Delhi without giving an option to litigants to be represented by their lawyers virtually.

Gujarat High Court Allows Report Filed by Official Liquidator for Dissolution of the Company

The present report had been filed by the Official Liquidator for the dissolution of M/s AtRo Limited under the provisions of Section 497 (6)...

[WhatsApp Privacy Policy Row] It’s a Private App, Don’t Use It; Says Delhi High Court

On Monday, while hearing a petition regarding the privacy policy of WhatsApp, the Delhi High Court said, “It is a private app. Don't join it. It is a voluntary thing, don't accept it. Use some other app.”

Madras High Court Asks the State To Reconsider Number of Seats Allotted for Bcm Category

Mr. Shakkiya filed a Writ Petition under Article 226 of the Indian Constitution to issue a Writ of Mandamus. The petition sought to direct...

More Articles Like This

- Advertisement -