SC to transfer to self and hear all HC cases challenging proceedings against personal guarantors

New Delhi: The Supreme Court on Wednesday said it would transfer to itself and decide a host of cases filed in different high courts challenging bankruptcy proceedings initiated against personal guarantors of corporate debtors such as Reliance Communications chairman Anil Ambani.

A bench led by Justice L Nageshwara Rao made this decision while dealing with a plea filed by the Insolvency and Bankruptcy Board of India through advocate on record Vikas Mehta for transfer of all such cases to the top court.

High-profile individuals facing bankruptcy proceedings as individual guarantors of ailing corporate debtors include Lalit Jain, Yogesh Mehra, Atul Punj, Bala Chhabra, Ram Mehar Garg, Mahendra Kumar Rajpal, Ajay Mehra, Sabbineni Surendra, and Sanjay and Arti Singhal.

They have challenged the proceedings under various provisions of the Insolvency and Bankruptcy Code (IBC) including Sections 95, 96, 99, 100 and 101, apart from a government notification of November 15, 2019, bringing into effect the Part III of the IBC relating to personal guarantors to corporate debtor.

These cases are pending before high courts of Madhya Pradesh, Telangana and Delhi. The high courts have stayed IBC proceedings pending a final hearing. The Supreme Court said these interim orders would continue for now.

“These ought to be consolidated to ensure certainty of law” and be decided within a “reasonable time frame” to ensure “ease of business,” additional solicitor general Madhavi Divan, who represented bankruptcy board, told the bench.

Solicitor general Tushar Mehta who represented State Bank of India, leading lender to RCom, said there was a “concern” the issue would not be quickly decided in high courts. Lawyers for most of the personal guarantors opposed the transfer. Formal orders to this effect are expected on Thursday.

Ambani was represented by lawyer Mahesh Agrawal.