SBI will soon start Personal Insolvency Proceedings Against Anil Ambani. The National Company Law Tribunal (NCLT) has admitted a petition filed by State Bank of India (SBI) to start personal insolvency proceedings against industrialist Anil Ambani. Action may be taken against him as he was a personal guarantor for loans given to Reliance Communications.
The Mumbai bench of the NCLT admitted SBI’s application seeking recovery of more than ₹1,200 crore from Anil Ambani under the Insolvency and Bankruptcy Code (IBC).
SBI had approached the tribunal in 2020, claiming that Ambani had provided personal guarantees for loans taken by Reliance Communications.
Under laws like Section 128 of the Indian Contract Act, a guarantor’s liability is co-extensive with that of the primary borrower. This means the bank does not need to exhaust all its legal options against the borrower first before pursuing the guarantor.
With the tribunal’s approval, the personal insolvency resolution process can now begin. A Resolution Professional is also expected to be appointed under the IBC framework. The detailed order from the tribunal is still awaited.
The case was heard by a bench consisting of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar. The bench approved SBI’s application through an oral order.
SBI argued that Ambani had personally guaranteed loans taken by Reliance Communications. The bank sought recovery after the telecom company entered the Corporate Insolvency Resolution Process (CIRP) due to loan defaults.
Reliance Communications was admitted into CIRP in 2019. According to data from the Insolvency and Bankruptcy Board of India (IBBI), the company’s admitted liabilities are more than ₹94,000 crore.
At the time SBI filed the insolvency application against Ambani, Reliance Communications owed the bank nearly ₹5,000 crore.
Responding to the tribunal’s decision, a spokesperson for Anil Ambani said the case relates to a disputed personal guarantee that was allegedly provided to SBI in 2016. The spokesperson said the guarantee was given before India’s personal insolvency framework came into effect.
The spokesperson also stated that the loan facility was taken by Reliance Communications to repay borrowings from Chinese lenders and that Ambani did not receive any personal benefit from the funds.
According to the spokesperson, Ambani’s legal team will review the detailed order once it is available and will challenge it through appropriate legal channels if advised.
The spokesperson added that Anil Ambani remains confident that he will be able to defend his position before the appropriate legal forums.
According to media reports, Ambani is expected to challenge the NCLT order before the National Company Law Appellate Tribunal (NCLAT).
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