InvestorQ : What exactly is the RCOM-SBI case on which the Supreme Court announced its order last week?
vidhya Laxmi made post

What exactly is the RCOM-SBI case on which the Supreme Court announced its order last week?

Answer
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sarah Leo answered.
1 month ago


Last week, when the Supreme Court refused to vacate the stay sought by Anil Ambani against personal bankruptcy, the issue of personal bankruptcy again came to the fore. Now this case goes back to the high court to legally slug it out.

In December 2019, personal bankruptcy was brought under the ambit of NCLT. In the event of business bankruptcy, NCLT could initiate personal bankruptcy against promoters, if they had guaranteed a loan. That is where the Anil Ambani / SBI legal dispute started.

When IBC was amended, SBI chose to pressure NCLT to appoint an independent resolution professional for personal bankruptcy proceedings against Anil Ambani. With the latest SC ruling, case will be argued in the Delhi High Court in October.

This genesis of the case is in 2016 wherein a loan by SBI to RCOM was personally guaranteed of Anil Ambani. The counsel has argued that it was a letter of comfort and not a legally enforceable guarantee. Hence he has question the applicability to the individual.

In August Anil Ambani had sought a stay from the Delhi High Court and once the stay was given, SBI immediately approached the Supreme Court to quash the stay. With the SC refusing to vacate the stay, it goes back to the Delhi High court for next round.