Bad news for the likes of Anil Ambani. The Supreme Court has clarified that lenders are well within their right to take business tycoons who were promoters of companies that are not paying up dues to court.
A two-judge panel of Justice L. Nageswara Rao and Justice Ravindra Bhat on Friday dismissed petitions challenging this provision in the Insolvency and Bankruptcy Code (IBC). This law, introduced by the Modi government in 2019, had notified provisions which permitted lenders to file parallel cases against not just against the company defaulting, but also the promoter tycoon of the company who guaranteed those loans.
This would mean banks can now take action to attach personal assets of promoter tycoons who've given the guarantee while loans were granted to their company.
Despite the 2019 government notification that action can be taken against promoters, banks and other lending institutions had found the going tough in moving IBC against powerful business tycoons, with several cases being filed in various courts, and given stay, against any such move. Friday's verdict was on 75 of such petitions, which the apex court had taken over late last year.
This SC's dismissal of all these challenges to the government notification will be a big setback to promoter tycoons like Anil Ambani of Reliance ADA, Venugopal Dhoot of Videocon and Kapil Wadhwan of DHFL.
