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NCLT appoints Resolution Professional to examine SBI petition against Anil Ambani

Updated : August 21, 2020 08:26 PM IST

The Mumbai bench of the National Company Law Tribunal (NCLT) has appointed Jitender Kothari as the Resolution Professional to examine State Bank of India's (SBI) petition against Anil Ambani, the chairman of Reliance Communications (RComm), filed over his firm's Rs 1,200 crore personal guarantee to the lender.

The case is in connection with SBI's credit facilities given to RComm and Reliance Telecom Infrastructure Ltd (RTIL) in 2016.

"Both RCOM and RITL committed defaults in repayment in and around January 2017. The accounts were retrospectively declared as Non-Performing Account (NPA) with effect from 26.08.2016 pursuant to the Risk-Based Supervision during the year 2017," observed NCLT.

The order further added, "Such retrospective declaration seems rather incongruous, akin to the adage 'putting the cart before the horse'. While debt and default have remained undisputed, the incongruity of declaration of NPA, has not been raised and contested by the Respondent. Besides, 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."

The court observed that Section 60(2) of the Code provides that proceedings against personal guarantors can simultaneously be filed, maintaining that it is wrong to assume that no action can be taken until a resolution plan is accepted.

"Sec 60(2) clearly provides for proceedings to be launched against personal guarantors, running parallel to CIRP. Fallacious to assume that no action can be taken against guarantors until Resolution Plan is accepted," the order stated.

SBI informed NCLT that loans worth Rs 565 crore and Rs 635 crore were given to Reliance Communications and RTIL respectively in August 2016 by the lender. Anil Ambani, in September 2016, provided a personal guarantee for availing the credit facility.

However, in 2017, accounts of RComm and RITL fell in default, retrospectively, since Aug 2016. In January 2018, the lender invoked the personal guarantee issued by Anil Ambani.

Anil Ambani told NCLT that Rcomm and RITL were forced to default in repayments by commercial and market conditions.

An Anil Ambani spokesperson told CNBC-TV18 that the group was reviewing NCLT order and taking advice on filing an appropriate appeal against RP appointment.

"NCLT order directing RP appointment does not constitute an admission of SBI's application," said the spokesperson, adding that the resolution professional will examine SBI's insolvency application against Anil Ambani and submit a report to NCLT.

The spokesperson added that the NCLT order will have no bearing on operations of Rel Infra, Rel Power and Rel Cap.

Published : August 21, 2020 01:59 PM IST

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