Mumbai, June 11: The National Company Law Tribunal (NCLT), Mumbai Bench, has admitted insolvency proceedings against Reliance Group Chairman Anil Ambani as he stood a personal guarantor for loans availed by Reliance Communications Ltd. (RCOM) and Reliance Infratel Ltd. (RITL). The proceedings relate to an alleged default of Rs 853.25 crore owed to the State Bank of India (SBI).
Tribunal observations on personal guarantee
In its order, the NCLT observed that Ambani’s contention that the debt stood discharged through conversion into equity, optionally convertible debentures (OCDs), or assignment under the resolution plans was misconceived.
“The Personal Guarantor’s contention that the debt stands fully discharged by conversion of debt into equity, optionally convertible debentures (‘OCDs’), or assignment under the resolution plan is misconceived. In RCOM, the plan is an asset monetisation construct. The Successful Resolution Applicant proposes to issue zero-coupon OCDs to creditors, including SBI, with redemption dependent on future asset sales, spectrum monetisation and litigation outcomes,” the tribunal noted.
The tribunal further observed that no cash recovery had been received by SBI till date and that even if certain recoveries were eventually made under the RCOM resolution plan, the bank had already taken a substantial haircut. Therefore, the debt remained largely unsatisfied and continued to be in default.
Background of loans and guarantee invocation
According to SBI, RCOM and its subsidiary RITL had obtained loan facilities of Rs 565 crore and Rs 635 crore, respectively, in 2016 for refinancing existing debt. Ambani executed a Deed of Personal Guarantee in favour of SBI on September 23, 2016. Following defaults by the borrower companies, SBI invoked the guarantee on January 31, 2019. However, no repayment was made thereafter.
During the proceedings, Ambani contended that the guarantee had become unenforceable following approval of the resolution plan for RCOM. He further argued that the guarantee itself was void because it was executed after the borrower’s account had effectively become a non-performing asset (NPA). Ambani also challenged the RP’s report, alleging that it was incomplete and failed to adequately consider his objections.
Rejecting these submissions, the NCLT held that the guarantee was a continuing guarantee and that the resolution plans of both RCOM and RITL expressly preserved lenders’ rights to enforce personal guarantees and other third-party securities.
The tribunal further ruled that the retrospective classification of the loan account as an NPA was carried out in accordance with RBI norms following restructuring of the debt and did not render the guarantee unlawful.
Statements from Anil Ambani and SBI
A spokesperson for Mr. Anil D. Ambani said, “The Order dated 11 June 2026, passed by the NCLT, Mumbai, relates to a disputed personal guarantee allegedly extended by Mr. Ambani to the State Bank of India in 2016 — that is, ten years ago — even before the promulgation of personal insolvency laws.
The underlying facility had been availed by Reliance Communications for the repayment of its borrowings from Chinese lenders, and Mr. Ambani derived no personal benefit from the said funds.
The Order, once available, will be reviewed by Mr. Ambani’s legal team and challenged through appropriate legal remedies, as advised. Mr. Ambani remains confident of vindicating his position before the appropriate forums.”
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The DSK Legal Insolvency Team, representing SBI, said, “We welcome the NCLT Mumbai Bench’s order admitting the insolvency petition against Anil Ambani. The ruling reaffirms the settled legal position that a personal guarantor’s liability remains enforceable until the underlying debt is fully discharged. Tribunal rightly upheld the findings of the Resolution Professional that a clear debt and default of Rs 853.25 crore exist, and that the approval of resolution plans of the corporate debtor does not extinguish or absolve a personal guarantor of their legal obligations, unless expressly specified. This order marks a significant milestone for institutional creditors diligently pursuing maximum recovery and safeguarding financial accountability.”
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