BANKRUPTCY PROCEEDINGS AGAINST ANIL AMBANI
National Company Law Tribunal (NCLT) which is a quasi-judicial authority has accepted to institute bankruptcy proceedings against Anil Ambani who is the Chairman of Reliance Communications (R Comm). Previously State bank of India (SBI) had given credit facilities to Reliance Telecom Infrastructure Ltd (RTIL) and Reliance Communications which was under the Reliance ADAG group headed by Anil Ambani in August 2016. State Bank of India granted a loan of Rs 565 crores to Reliance Communications and Rs 635 crores to Reliance Telecom Infrastructure Ltd in August 2016. In September 2016 Anil Ambani provided a personal guarantee for availing credit facility from SBI. Later in 2017, there was default by Reliance Communications and Reliance Telecom Infrastructure Ltd in repayment. The accounts of R Com and RTIL were retrospectively declared as Non-Performing Account (NPA) with effect from 26-08-2016, this was even before the loan agreement was entered. NCLT said such a retrospective declaration seems inappropriate. In February 2020 SBI issued a demand notice to Anil Ambani seeking recovery of dues. It was submitted by the Respondent to the NCLT that the Tribunal should have waited until the resolution of Corporate Debtor was completed, but the same was rejected by the Tribunal. Hence it was appropriate to issue directions according to Section 97(3) of Insolvency and Bankruptcy Code (IBC), 2016. Rule 8 of Insolvency and Bankruptcy (Application to Adjudicating Authority of Insolvency Resolution Process for Personal Guarantors) Rules 2019 provides for the purposes for inter alia of Section 97 subsection (2). The Insolvency and Bankruptcy Board of India (IBBI) can share the database of Insolvency Professionals and share a panel of Insolvency Professionals for inter alia of Section 97 subsection (4). Hence it is not required to direct the Insolvency and Bankruptcy Board of India to nominate the name of Resolution Professional. NCLT has ordered the State Bank of India to take necessary action.
