India / SC refuses to resume bankruptcy case against Anil Ambani

NEW DELHI: The Supreme Court on Thursday dismissed a petition filed by the State Bank of India (SBI) seeking to lift a stay on initiating personal bankruptcy proceedings against Anil Ambani, chairman of Reliance Group.

An apex court bench headed by Justice L. Nageswara Rao directed Delhi High Court, which had granted the stay, to consider the issue on 6 October. The bench, also comprising Justices Hemant Gupta and S. Ravindra Bhat, gave liberty to SBI to seek modification of the stay order passed by the high court.

“Why don’t you go back to high court to argue the Anil Ambani case?" asked the top court bench.

A high court division bench of Justice Vipin Sanghi and Justice Rajnish Bhatnagar had on 27 August passed an interim order staying the Mumbai bankruptcy tribunal’s order permitting part of bankruptcy proceedings. The bench said proceedings against the corporate debtors will continue and issued notice to the central government, SBI and others. The bench also restrained Ambani from selling or transferring any of his personal assets.

SBI told the apex court last week that the high court did not grant the bank an opportunity to file a counter-affidavit and was not justified in passing an interim order staying insolvency proceedings against Ambani “who owes the bank public money to the tune of Rs1,707 crore".

SBI also argued that the high court was not justified in entertaining the writ petition when the territorial jurisdiction was in Mumbai as the demand notices were issued by the bank in Mumbai, insolvency proceedings were filed before the National Company Law Tribunal’s Mumbai bench, the writ petitioner (Ambani) resides in Mumbai, and the petitioner bank (SBI) has its headquarters and corporate office in Mumbai.

SBI said “great prejudice and irreparable damage" would be caused to the petitioner if the impugned judgement of the high court is brought into effect. The bank prayed for an “ad-interim ex-parte" stay order on the 27 August interim order passed by the high court.

In March, SBI had filed a petition in the Mumbai bench of NCLT under section 95 of the Insolvency Bankruptcy Code (IBC) for personal bankruptcy based on guarantees issued by Ambani. NCLT had appointed Jitender Kothari as resolution professional (RP).

On 26 August, Ambani had moved Delhi High Court against the appointment of an RP on personal guarantees given to SBI for securing corporate loans. Ambani had challenged the validity of the section pertaining to personal guarantee and asked if there is any enabling provision in IBC for such an order.