The Mumbai bench of the National Company Law Tribunal (NCLT) on Thursday admitted State Bank of India’s plea to initiate a personal insolvency resolution process against Anil Ambani.The state-owned lender had moved the tribunal in 2020 to recover over Rs 1,200 crore from Anil Ambani under the personal guarantee clause of the bankruptcy law. The admission of the petition paves the way for insolvency proceedings against Ambani in his capacity as a personal guarantor under the Insolvency and Bankruptcy Code.The division bench of judicial member Sushil Mahadeorao Kochey and a technical member, Prabhat Kumar, had allowed the SBI’s application through oral order. The detailed order was not uploaded till the time of filing the story.The bank had argued that Ambani had personally guaranteed loans taken by Reliance Communications and that the state-owned lender is seeking to recover them after the telecom company was admitted under the Corporate Insolvency Resolution Process (CIRP) following a default on dues.The spokesperson for Ambani, in a statement, said the order relates to a disputed personal guarantee allegedly extended by him to the SBI 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,” said the spokesperson. “The Order, once available, will be reviewed by the legal team and challenged through appropriate legal remedies, as advised. Mr Ambani remains confident of vindicating his position before the appropriate forums,” said the statement.Now with the order, the action is expected to shift to the National Company Law Appellate Tribunal (NCLAT). Ashish K Singh, managing partner of the law firm Capstone Legal, said the ruling raises a fundamental legal question with implications far beyond this case.“Can a personal guarantor be subjected to a statutory framework that did not exist when the guarantee was allegedly executed? The answer could shape the outcome of several pending insolvency proceedings involving personal guarantors,” said Singh.The public sector lender moved the National Company Law Tribunal (NCLT) under Section 95 (1) of IBC that empowers creditors to initiate insolvency resolution proceedings against individuals, such as personal guarantors of corporate debtors, through an appointed Resolution Professional.In 2019, Reliance Communications was admitted under the Corporate Insolvency Resolution Process. As per the latest available data with the Insolvency and Bankruptcy Board of India (IBBI), the company’s admitted liabilities stood at over Rs 94,103 crore.At the time of approaching the tribunal against Ambani, the lender had approved a resolution plan for Reliance Communications in March 2020 that envisaged lenders recovering around Rs 23,000 crore, entailing a haircut of nearly 50%. At the time of filing the personal insolvency application, RCom owed nearly Rs 5,000 crore to SBI.