NCLT Admits SBI’s ₹8,532.5 Crore Insolvency Plea Against Anil Ambani as Personal Guarantor to RCOM, RITL Loans [Read Order]

In a recent development under the Insolvency & Bankruptcy Code (IBC), the National Company Law Tribunal (NCLT) Mumbai Bench‑I has admitted State Bank of India’s (SBI) petition seeking initiation of insolvency proceedings against industrialist Anil Dhirajlal Ambani in his capacity as personal guarantor for loans extended to Reliance Communications Ltd. (RCOM) and Reliance Infratel Ltd. (RITL).

The applicant, SBI, had sanctioned credit facilities of ₹565 crore to RCOM and ₹635 crore to RITL in 2016. Ambani executed a personal guarantee deed dated 23 September 2016, promising repayment if the companies defaulted. Both accounts turned non‑performing (NPA) in 2017, prompting SBI to invoke the guarantee and demand ₹692 crore from Ambani in January 2019.

When no payment was made, SBI filed an original application before the Debt Recovery Tribunal and later moved the NCLT under Section 95 of the IBC, claiming a total default of ₹8,532.5 crore.

SBI argued that Ambani’s liability continued despite the approval of resolution plans for RCOM and RITL, citing the Supreme Court’s ruling in Lalit Kumar Jain v. Union of India, which affirmed that discharge of a corporate debtor does not absolve a personal guarantor.

The respondent, Ambani, represented by Senior Advocate Prateek Seksaria, contended that the guarantee was invalid and stood extinguished after the resolution plans were approved. He also alleged procedural lapses and bias in the Resolution Professional’s (RP) report.

The RP, Mr. Prashant Jain, concluded that the guarantee was a continuing guarantee, remaining enforceable until all borrower obligations were discharged. He noted that no repayment had occurred and recommended initiation of insolvency proceedings.

The NCLT observed that the RP’s role under Section 99 is recommendatory, not adjudicatory, and that respondent objections on guarantee validity and discharge of liability must be decided later under Section 100.

The bench comprising Technical Member Prabhat Kumar and Judicial Member Sushil Mahadeorao Kochey held that SBI had produced sufficient evidence of debt and default and that the guarantee remained enforceable.

The tribunal also rejected Ambani’s argument that retrospective NPA classification violated RBI norms, stating it was done in accordance with the Income Recognition and Asset Classification (IRAC) guidelines.

The tribunal declared a moratorium effective from the date of admission, halting all ongoing or new legal proceedings related to Ambani’s debts for a period of 180 days or until a repayment plan is approved under Section 114, whichever occurs earlier. During this moratorium, creditors cannot pursue recovery actions, and Ambani is barred from transferring or disposing of his assets or any beneficial interests.

The tribunal appointed  Prashant Jain as the Resolution Professional (RP), directing him to publish a public notice within seven days on the NCLT Mumbai website inviting claims from all creditors within 21 days of publication.

Finally, the tribunal admitted the main petition and dismissed Ambani’s interlocutory application , clearing the way for the personal insolvency proceedings to move forward.

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