NCLT initiates bankruptcy proceedings against Anil Ambani

The NCLT has directed to initiate insolvency proceedings against Reliance Communications Chairman Anil Ambani to recover Rs 1,200 crore under the personal guarantee clause of the bankruptcy law. Anil Ambani had given a personal guarantee to the loans given by State Bank of India (SBI) to Reliance Communications and Reliance Infratel in August 2016. The National Company Law Tribunal (NCLT) Mumbai in its order on August 20 said both RCom and RITL committed default in repayment in and around January 2017.

The accounts were retrospectively declared as non-performing account (NPA) with effect from August 26, 2016, even before loan agreements had been entered into. “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 the 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 order said.