The Supreme Court of India on Thursday rejected the State Bank of India’s plea to vacate stay on the bankruptcy of famous businessman Anil Ambani. The three-judge committee dismissed the State Bank’s appeal to lift the stay given by the Delhi High Court earlier on the 27th of August 2020. The State Bank of India had filed this appeal in the Supreme court after the High Court had passed an interim order on the case.
The High Court’s Judgement that displeased the SBI
Last month on the 27th, a bench consisting of Justice Vipin Sanghi and Rajnish Bhatnagar had restrained businessman and owner of Reliance Industries, Anil Ambani from transferring, dealing, or disposing of any of his assets or rights including any beneficial interest till its next hearing date. The court decided 6th October 2020 as the next hearing date in the case.
Earlier Ambani had moved to the Delhi High Court against the appointment of a resolution professional on the personal guarantees given to The State Bank of India for securing loans for Reliance Communication and Reliance Infratel. These loans were secured by the business in 2016 for an amount of 1195 crore rupees.
On the initial hearing, the Delhi High Court had said that
“The proceedings against the petitioner under Part-III of the IBC (Individual Insolvency) shall remain stayed.”
It also elaborated that the proceedings against the corporate debtor will continue as it is. On this behalf, notices were issued to the Central Government, the State Bank of India and all the other concerned parties.
The reason State Bank of India is not pleased with the High Court’s order
The SBI pleaded against the Supreme Court saying that it did not have an opportunity to file a counter-affidavit against Anil Ambani and the High Court’s decision was not justified in passing an interim order staying the insolvency proceedings against the businessman. The bank argued that it was not fair to allow a billionaire to wiggle out of his contractual obligations.
In its appeal, the bank argued,
“It’s not in the public interest to grant a stay of insolvency proceedings against the surety, when the bank, which deals with public money, has to recover a huge sum of more than Rs 1,707 crore from the writ petitioner.”
The bank had hoped that the court would passed a judgement in their favour and allow the National Company Law Tribunal to resume its proceedings.
What the Supreme Court has to say about it?
The three-judge bench of Justice L Nageswara Rao, Justice Hemant Gupta and Justice S Ravindra Bhat, dismissed the State Bank’s plea questioning:
“Why don’t you go back to high court to argue the Anil Ambani case?”
The Apex court of the country seems to agree with the order pf the Delhi High Court and has sustained the stay imposed by it. The court also redirected the case to the Delhi High Court for its next hearing scheduled on 6th October 2020.