State Bank of India Vs Anil Dhirajlal Ambani (NCLT Mumbai)
The National Company Law Tribunal (NCLT), Mumbai Bench, admitted an application filed by State Bank of India (SBI) under Section 95 of the Insolvency and Bankruptcy Code, 2016, initiating the Insolvency Resolution Process (IRP) against a personal guarantor in relation to credit facilities extended to Reliance Communications Limited (RCOM) and Reliance Infratel Limited (RITL). SBI claimed a default of ₹853.25 crore as on 1 March 2019, while the date of default specified against the personal guarantor was 31 January 2019.
According to SBI, RCOM and RITL had availed rupee loan facilities under agreements executed in August and September 2016. Personal guarantees were executed on 23 September 2016 in favour of SBI. The corporate borrowers subsequently defaulted, and SBI invoked the personal guarantee on 31 January 2019. Despite correspondence and demand notices, no repayment was made by either the borrowers or the guarantor.
The proceedings were delayed by multiple legal challenges. After the filing of the Section 95 application in March 2020, the personal guarantor challenged the initiation of proceedings before the Delhi High Court, which stayed proceedings under Part III of the IBC while restraining alienation of assets. Subsequently, constitutional challenges relating to personal guarantor provisions were transferred to the Supreme Court. Following decisions in Lalit Kumar Jain v. Union of India and Dilip B. Jiwrajka v. Union of India, the constitutional validity of the relevant IBC provisions was upheld, resulting in the vacation of interim protections.
