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2025 Supreme(Online)(NCLT) 3148
NATIONAL COMPANY LAW TRIBUNAL
Shri Prabhat Kumar, Shri V.G. Bisht, JJ
ANIL DHIRAJLAL AMBANI – Appellant
Versus
STATE BANK OF INDIA & ANR. – Respondent
C.P.(IB) NO. 916 (MB) OF 2020
For the Appellants/Petitioners: Sr. Adv. Prateek Seksaria, Adv. Kartik Hede
For the Respondents: Adv. Jash Shah, Adv. Astha Ojha, Adv. Prateek Kumar
The resolution professional must adhere to the principles of natural justice by allowing debtors sufficient opportunity to respond to information requests; failure to do so undermines the insolvency process.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 60(5), 98, and 99 - Personal Guarantor application - Applicant seeks to replace the Resolution Professional and challenge the report filed by the current RP, citing procedural improprieties and excessive information requests - The RP acted beyond necessary bounds, seeking irrelevant information, thus denying the Applicant an opportunity to adequately respond, especially during COVID-19 restrictions. (Paras 4, 20, 24)
Facts of the case:
The Applicant executed a personal guarantee for a credit facility, which was classified as non-performing. A subsequent report by RP recommended admission of an insolvency application against the Applicant without proper examination and in violation of the opportunity for response.
Findings of Court:
The court upheld the Applicant's right to a fair process, concluding the RP failed to provide adequate opportunity to respond, necessitating a new RP appointment.
Issues: Whether the resolution professional acted within the legal framework while requesting information from the debtor, following principles of natural justice.
Ratio Decidendi: The court ruled that the RP must not exceed seeking necessary and relevant information; the Applicant was denied a fair hearing due to the RP's conduct. A new RP was appointed to ensure fairness in the process.
Result: The application seeking replacement of the RP was granted, and a new RP was appointed.
| Table of Content |
|---|
| 1. application and prayers by anil ambani. (Para 1 , 2) |
| 2. background information on insolvency proceedings. (Para 3 , 4) |
| 3. applicant's claims against resolution professional. (Para 5 , 6) |
| 4. responses to claims and arguments on urgency. (Para 7 , 8) |
| 5. discussion of section 98 and replacement of rp. (Para 9 , 10) |
| 6. legal requirements and obligations of rp. (Para 11 , 12 , 13 , 14) |
| 7. the principle of natural justice in rp actions. (Para 15 , 16 , 17) |
| 8. rp's request for information during covid-19. (Para 18 , 19 , 20 , 21 , 22) |
| 9. potential bias in rp's information requests. (Para 23 , 24) |
| 10. replacement of rp and appointment of new rp. (Para 25 , 26 , 27) |
ORDER
1. This Application IA No.1773 of 2024 is filed by Mr. Anil Dhirajlal Ambani (“Applicant/Personal Guarantor”), on 16.01.2024 under Section 179 r/w Section 60 (5) of the Code a/w Rule 11 of NCLT Rules, 2016. The Applicant has made following prayers:
a. This Hon'ble Tribunal be pleased to pass an order rejecting the Report filed by Mr. Jitender Kothari as the resolution professional, being Report dated 31st May 2021.
b. This Hon'ble Tribunal be pleased to pass an order replacing Mr. Jitender Kothari as the resolution professional in the Insolvency Application i.e., Company Petition (IB) No. 916 (MB) of 2020 in accordance with section 98 of the IBC.
c. This Hon'ble Tribunal be pleased to pass an order directing the newly appointed Resolution Profession to prepare and file a fresh report under section 99(1) of IBC in accordance with law in the Insolvency Application i.e., Company Petition (IB) No. 916 (MB) of 2020.
d. Pending the hearing and final disposal of this application, keep the hearing of the Insolvency Application i.e., Company Petition (IB) No. 916 (MB) of 2020 in abeyance.
e. Pending the hearing and final disposal of this application, restrain Respondent No. 2, Mr. Jitender Kothari, from taking any steps whatsoever as a resolution professional in the present Insolvency Application.
f. For ad interim and interim reliefs in terms of prayer ( d) and ( e) above.
g. For costs.
h. For such other and further reliefs as this Hon'ble Tribunal deems fit and proper in the facts and circumstances of this case.
2. The Applicant has filed the present Application for setting aside the Report dated 31st May 2021 ("Report") issued by the Resolution Professional Mr. Jitender Kothari ("RP/Respondent No. 2"), under section 99(1) of the IBC alleging such Report being illegal, stale and contrary to the law laid down by the Hon'ble Supreme Court in the case of Dilip Jiwrajka vs. Union of India (2023) ibclaw.in 147 SC
3. The brief facts leading to filing of Company Petition CP(IB) 916(MB) of 2020 are as follows :
a. The Applicant had executed a personal guarantee dated 23rd September, 2016 in favor of State Bank of India (“SBI/Respondent No. 1”) to secure the credit facility extended by SBI to Reliance Communications Limited in terms of facility agreement dated 29.8.2016. The said credit facility was classified as non-performing assets retrospectively with effect from 26th August 2016.
b. The Respondent No. 1, by its demand notice dated 31st January 2019 invoked the said Guarantee and called upon the Applicant to pay a sum of Rs. 1384,81,64,562/- within 21 (days) from the date thereof. The Respondent, thereafter, issued a demand notice on 24th February, 2020 to the Applicant. Thereafter, on or about 12th March 2020, the Respondent filed an Application registered as CP(IB) 916(MB) of 2020 to initiate Insolvency Resolution Process in case of the Applicant Personal Guarantor in terms of Part III of Insolvency & Bankruptcy Code, 2016 (“IBC”) .
4. Brief facts leading to filing of present application are stated as under :
a. This Tribunal appointed Respondent No. 2 as Resolution Professional vide its Order dated 20.08.2020 to file its Report in terms of Section 99 of IBC after examining the Company Petition 916 of 2020.
b. The RP issued an email dated 22.8.2020 22.45 PM asking the Applicant
