Pearl Narang is a final year law student of B.B.A.LL.B (Hons.) at Chandigarh University, Mohali and is currently interning as a Trainee in Business World Legal Community. She is also pursuing a diploma in Contract Drafting, Negotiation and Dispute Resolution. She is passionate about both law and writing.
The Delhi High Court on August 27 stayed the IBC proceedings against the Chairman of the Reliance ADA Group, Anil Ambani.
Last month, the National Company Law Tribunal, (NCLT) Mumbai appointed a Resolution Professional in response to one SBI unit's application filed under Part III of the Insolvency & Bankruptcy Code. The application was filed for initiating an insolvency resolution process against Mr Ambani.
Mr Ambani filed a plea in the Delhi High Court. The plea challenged the appointment of a resolution professional for a personal guarantee of over Rs 1200 crore that he had given to SBI for loans granted to his companies.
However, Mr Ambani has contested the legal validity of provisions of IBC that pertain to personal guarantee and bankruptcy through his plea. His petition further questioned if action against a personal guarantor is allowed under the provisions of the Code and whether the personal guarantee can be enforced while the resolution process is pending.
The Delhi High Court has asked the Centre, SBI and IBBI (The Insolvency and Bankruptcy Board of India) for filing replies in this matter.
The Central government, SBI, and IBBI opposed the stay on the IBC process in fear that a sale of assets would prevent them from recovering debts later. In this regard, Delhi HC has restrained Mr Ambani from selling or transferring any personal assets until the next hearing on October 6.
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