The National Company Law Tribunal (NCLT), Mumbai Bench-I has admitted a petition filed by the State Bank of India (SBI) under Section 95 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of the Insolvency Resolution Process against Anil Dhirajlal Ambani as a personal guarantor to credit facilities extended to Reliance Communications Limited (RCOM) and Reliance Infratel Limited (RITL), holding that the personal guarantee executed by him remains fully enforceable and has not been discharged by the approval of the RCOM resolution plan.
A bench comprising Shri Prabhat Kumar (Member, Technical) and Shri Sushil Mahadeorao Kochey (Member, Judicial) pronounced the order on June 11, 2026 in State Bank of India v. Anil Dhirajlal Ambani [C.P. (IB)/916(MB)2020 along with I.A.(IBC)/5420(MB)2025]. The Tribunal simultaneously dismissed an interlocutory application filed by Anil Ambani seeking rejection of the Resolution Professional’s report under Section 99 of the IBC and a declaration that the guarantee stood discharged. A moratorium in respect of all debts of the personal guarantor has been declared with immediate effect.
Background
Anil Ambani was the Chairman of the Reliance ADA Group, the umbrella organisation under which RCOM and its subsidiary RITL functioned. In 2015-16, RCOM approached SBI’s Project Finance Strategic Business Unit seeking credit facilities of Rs 565 crore for repayment of existing financial indebtedness. Similarly, RITL approached SBI for credit facilities of Rs 635 crore. Under the Rupee Loan Facilities Agreement dated August 29, 2016, as amended and restated on September 8, 2016, SBI provided the respective loan amounts to RCOM and RITL.
Anil Ambani, along with other securities, executed a Personal Guarantee Deed dated September 23, 2016 in favour of SBI in respect of both sets of credit facilities. RCOM and RITL committed defaults in repayment around January 2017, and their accounts were retrospectively classified as Non-Performing Assets (NPA) with effect from August 26, 2016 pursuant to a Risk Based Supervision exercise in 2017.
SBI invoked the personal guarantee on January 31, 2019 and issued a demand notice, calling upon Anil Ambani to pay Rs 692.19 crore in respect of RCOM’s default. Despite correspondence, no payment was received. SBI thereafter filed an Original Application before the Debt Recovery Tribunal, Mumbai and ultimately filed the present petition under Section 95 of the IBC before the NCLT on March 12, 2020, claiming a default of Rs 853.25 crore as on March 1, 2019.
Anil Ambani’s Challenges- Constitutional And Substantive
Anil Ambani mounted a sustained legal challenge to the proceedings at multiple levels. He filed a Writ Petition before the Delhi High Court in 2020 challenging the IBC’s personal insolvency provisions, which stayed the proceedings. Following transfer to the Supreme Court, the constitutional validity of the personal insolvency provisions was upheld in Lalit Kumar Jain v. Union of India [(2021) 9 SCC 321], vacating the stay. He filed another writ petition before the Supreme Court in 2022, which was tagged with Dilip B. Jiwrajka v. Union of India [2023 SCC OnLine SC 1530], where the Supreme Court again upheld the constitutional validity of the personal guarantor insolvency framework.
On the merits, Anil Ambani raised three principal defences before the NCLT: first, that the Guarantee Deed was void as it was executed after the date on which the accounts had been classified as NPA (albeit with retrospective effect); second, that the debt stood discharged pursuant to the approved RCOM resolution plan; and third, that no subsisting liability remained enforceable against him after implementation of the resolution plan.
Resolution Professional’s Report Under Section 99
This Tribunal had, on July 15, 2025, replaced the earlier Resolution Professional Mr. Jitender Kothari and appointed Mr. Prashant Jain in his place, directing him to submit a fresh report under Section 99 of the IBC after providing due opportunity to the personal guarantor. Mr. Prashant Jain filed his report dated October 4, 2025 recommending acceptance of the application and initiation of insolvency resolution proceedings, concluding that a valid debt existed, default had occurred, and the liability under the personal guarantee continued to remain in force.
The RP found that the guarantee deed contained a ‘continuing guarantee’ clause under Clause 4, which provided that the guarantee would remain valid and in full force until the obligations of the borrowers were discharged in full, and that the guarantor’s liability would survive any arrangement, restructuring, or insolvency process of the borrower companies. The RP noted that no material had been produced by Anil Ambani to demonstrate repayment or discharge of the debt.
Challenge To RP’s Report - IA No. 5420 Of 2025
Anil Ambani filed Interlocutory Application No. 5420 of 2025 under Section 60(5) of the IBC challenging the RP’s report as “inconclusive and non-speaking”, alleging that: the RP had proceeded substantially on SBI’s version without independent inquiry; critical documents furnished by SBI on August 14, 2025 and September 10, 2025 were never shared with him; only three days’ time was granted to furnish proof of repayment despite the matter involving complex factual and legal issues; and the RP had failed to seek documents from the RCOM Resolution Professional that would have disclosed the true status of SBI’s debt under the resolution plan.
He also prayed for a declaration from the Tribunal that the personal guarantee dated September 23, 2016 stood discharged post-approval of the RCOM resolution plan.
Tribunal’s Analysis And Findings
On the RP’s Non-Adjudicatory Role
The Tribunal, relying extensively on the Supreme Court’s constitution bench judgment in Dilip B. Jiwrajka v. Union of India, held that the RP’s function under Section 99 is purely administrative and not adjudicatory. The task of the RP is limited to examining whether the application under Section 95 is complete and whether a prima facie debt and default exist. The true adjudicatory function commences only at the Section 100 stage before the Adjudicating Authority. The Tribunal held that Anil Ambani’s attempt to compel the RP to adjudicate upon complex questions such as discharge of liability under the resolution plan, validity of the guarantee, and accounting treatment of debt was impermissible.
On the allegation that documents were not shared, the Tribunal found that the documents relied upon by SBI were documents that pertained to and had been executed or signed by Anil Ambani himself. The Tribunal also held that SBI’s explanations to the RP regarding the personal guarantor’s contentions did not constitute ‘additional information’ that the RP was obligated to share with the personal guarantor, given the non-adjudicatory nature of Section 99 proceedings.
On Validity Of The Guarantee - The NPA Timing Defence
Anil Ambani contended that the guarantee was void as it was executed on September 23, 2016, after the accounts had been classified as NPA with retrospective effect from August 26, 2016, thereby rendering the consideration for the guarantee unlawful under Sections 23 and 24 of the Indian Contract Act, 1872.
The Tribunal rejected this contention. Relying on the Supreme Court’s recent decision in State Bank of India v. Doha Bank Q.P.S.C. [(2026) ibclaw.in 234 SC], which had addressed an analogous situation involving RCOM and the same consortium of lenders, the Tribunal held that the accounts had been restructured after the initial NPA classification, and the guarantee was executed after such restructuring. The retrospective NPA classification was a consequence of the failure of the restructuring and was a statutory obligation under RBI’s Income Recognition and Asset Classification (IRAC) norms, not a discretionary act. The Tribunal observed:
"The earlier default committed by the Principal Borrower had, for the time being, eclipsed in view of restructuring arrangement and the lender was obligated to classify the account of principal borrower as NPA relatable to original date of default... in terms of RBI guidelines mandating classification w.r.t. original date of default in case of failure of restructuring."
The Tribunal further held that RBI’s prohibition on lending to NPA accounts is administrative in nature and does not render such lending illegal or fraudulent. Since the funds were disbursed only after the execution of the guarantee, there was no misrepresentation by SBI, and Sections 23 and 24 of the Contract Act had no application. Critically, the Tribunal noted that Anil Ambani was in de-facto control of the RCOM group as its director until November 2019 and could have ascertained the factum of default by acting diligently.
On Discharge Of Guarantee By Resolution Plan
The Tribunal emphatically rejected the contention that the personal guarantee stood discharged upon approval of the RCOM resolution plan. Relying on the Supreme Court’s landmark ruling in Lalit Kumar Jain v. Union of India [(2021) 9 SCC 321], the Tribunal held that approval of a resolution plan does not ipso facto discharge a personal guarantor of his liabilities under the contract of guarantee. The Tribunal also relied on BRS Ventures Investments Limited v. Srei Infrastructure Finance Limited [(2024) ibclaw.in 170 SC] and the recent Supreme Court ruling in Electrosteel Castings Ltd. v. UV Asset Reconstruction Company Ltd. [(2026) ibclaw.in 07 SC].
The Tribunal also pointed to the express terms of the approved RCOM resolution plan itself, specifically Clauses 5.18.11, 5.18.12, 6.8.8 and 6.8.9, which expressly preserved the rights of lenders, including SBI, to enforce personal guarantees notwithstanding the approval or implementation of the resolution plan. The clause provided that no rights under any personal guarantee shall be deemed extinguished, impaired, or assigned by virtue of the plan.
On the contention that debt had been discharged through conversion into Zero Coupon Optionally Convertible Debentures (ZOCDs) and equity under the UVARC resolution plan, the Tribunal found that the RCOM resolution plan was an asset monetisation construct, no cash had been received by SBI, significant litigation on spectrum dues had delayed plan implementation, and SBI had already been required to take a substantial haircut. The Tribunal held:
"It is not disputed that no money has so far been realized from the Resolution Plan(s) approved in case of RCOM and RITL by the applicant creditor, and the allocation of money in the resolution plan remain merely a financial proposal entitling the applicant creditor to certain amounts against the outstanding debt. Thus, the debt is still due and the same is in default.
The Order
The Tribunal admitted the petition under Section 95 of the IBC, initiating the Insolvency Resolution Process against Anil Ambani, and dismissed IA No. 5420 of 2025. The following key directions were issued:
A moratorium in relation to all debts of the personal guarantor was declared with immediate effect from the date of admission, to cease upon expiry of 180 days or upon the Tribunal’s order on the repayment plan under Section 114, whichever is earlier, as provided under Section 101 of the IBC. During the moratorium: all pending legal actions or proceedings in respect of any debt stand stayed; no creditor shall initiate legal action in respect of any debt; and Anil Ambani shall not transfer, alienate, encumber, or dispose of any of his assets or legal rights or beneficial interest therein.
Mr. Prashant Jain is confirmed as Resolution Professional and directed to cause a public notice to be published on the NCLT Mumbai Bench website within seven days of the order, inviting claims from all creditors within 21 days of such publication. SBI has been directed to deposit Rs 75,000 towards the RP’s fees and out-of-pocket expenses within one week.
Case Details
Case Title: State Bank of India v. Anil Dhirajlal Ambani
Case Numbers: C.P. (IB)/916(MB)2020 and I.A.(IBC)/5420(MB)2025
Court: National Company Law Tribunal, Mumbai Bench-I
Bench: Shri Prabhat Kumar (Member, Technical) and Shri Sushil Mahadeorao Kochey (Member, Judicial)
Date of Order: June 11, 2026
Financial Creditor’s Counsel: Sr. Adv. Zal Andhyarjina, Adv. Nirav Shah, Adv. Jash Shah, Adv. Astha Ojha, Adv. Prateek Kumar (DSK Legal)
Resolution Professional’s Counsel: Sr. Adv. Chetan Kapadia, Adv. Shlok Parekh, Adv. Rohan Agarwal, Adv. Anuya Pathare
Personal Guarantor’s Counsel: Sr. Adv. Prateek Seksaria, D.J. Kakalia, Adv. Rohit Gupta, Ms. Ragini Sharma
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