SBI Moves Supreme Court Against Stay Order On Anil Ambani Insolvency Case
State Bank of India has approached the Supreme Court seeking lifting of stay in the personal insolvency case against Anil Ambani.
State Bank of India has approached the Supreme Court challenging the stay granted by Delhi High Court on the personal insolvency case against Anil Ambani.
India’s largest lender has argued in its appeal that the former billionaire can’t be allowed to wriggle out of his contractual obligations by filing a writ challenging the personal insolvency provisions of Insolvency and Bankruptcy Code. The bank has claimed that as on March 2020, more than Rs 1,700 crore was due and payable by Ambani by virtue of him being the personal guarantor for loans extended to Reliance Communications Ltd. and Reliance Infratel Ltd.
“It’s not in public interest to grant stay of insolvency proceedings against surety, when the bank, which deals with public money, has to recover huge sum of more than Rs 1,707 crore from the writ petitioner,’’ the bank has said in its appeal, a copy of which was reviewed by BloombergQuint.
The personal insolvency provisions of the Insolvency and Bankruptcy Code were notified in November 2019, which SBI triggered against Ambani in June this year.
On Aug. 21, the Mumbai bench of the National Company Law Tribunal had agreed to hear the personal insolvency case against Ambani and appointed a resolution professional to verify the claims of the bank.
Soon after, Ambani approached a division bench of the Delhi High Court challenging the personal insolvency provisions of the IBC. A bench of Justice Vipin Sanghi and Justice Rajnish Bhatnagar ordered a stay on the case against Ambani and directed him to not alienate any of his assets until further orders.
“In the meantime, proceedings would continue in relation to the corporate debtor [Reliance Communications] and while dealing with those proceedings, the liability of the petitioner may also be examined by the insolvency resolution professional,” the Delhi High Court said in its order. “However, the proceedings against the petitioner under Part-III [personal insolvency provisions] of the IBC shall remain stayed.”
SBI has also questioned the choice of forum by Ambani saying the case has so far proceeded in Mumbai. “The writ petition before the Delhi High Court was clearly misconceived and hence not maintainable,” SBI has said in its plea to the apex court. “Anil Ambani does not even have a prima facie case that could justify a grant of stay.”
The appeal, according to the Supreme Court’s website, was filed on Sept. 3 and is yet to be given a date of listing.