Case Name: STATE BANK OF INDIA & ORS. VERSUS DOHA BANK Q.P.S.C. & ANR 

Petition Number: CIVIL APPEAL No. 8527 OF 2022 

Neutral Citation: 2026 INSC 423 

Date of Judgement: 28.04.2026

Coram: HON’BLE MR JUSTICE PAMIDIGHANTAM SRI NARASIMHA & HON’BLE MR JUSTICE ALOK ARADHE 

INTRODUCTION 

The present appeal before the Supreme Court was filed by the SBI Consortium challenging the concurrent orders of the NCLT and NCLAT, which had rejected their claims as financial creditors during a Corporate Insolvency Resolution Process (CIRP). The Court addressed the validity and enforceability of corporate guarantees under the Insolvency and Bankruptcy Code, 2016 (IBC), specifically evaluating whether alleged defects such as insufficient stamping, timing of execution, and non-disclosure in a corporate debtor’s financial statements can legitimately defeat the recognition of a “financial debt.”

FACTS 

The appellants (a consortium of banks led by SBI) extended rupee loan facilities to Reliance Communications Ltd. (RCOM) and Reliance Telecom Ltd. (RTL). In 2017, the Corporate Debtor (Reliance Infratel Limited – RITL) executed corporate guarantees in favour of the consortium to secure these loans. Although the Corporate Debtor’s accounts were first classified as Non-Performing Assets (NPA) in August 2016, they were restructured, but ultimately declared NPA again in December 2017 with retrospective effect from August 2016, as per RBI guidelines.

Upon the initiation of Corporate Insolvency Resolution Process CIRP against the Corporate Debtor in 2018, the SBI Consortium submitted claims based on the corporate guarantees. Doha Bank, another creditor, objected to these claims. Both the National Company Law Appellate Tribunal (NCLAT) and the National Company Law Tribunal (NCLT) rejected the consortium’s claims, reasoning that the guarantees were executed suspiciously when the company was already in default, were not disclosed in the Corporate Debtor’s financial statements, lacked proper verification by the Resolution Professional (RP), and were insufficiently stamped under the Maharashtra Stamp Act.

ISSUES

1. Whether the Corporate Guarantees executed by the Corporate Debtor constitute “financial debt” within the meaning of Section 5(8) of the Code. 
2. Whether the claims of the appellants were liable to be rejected for non-submission or improper verification of documents. 
3. Whether the findings recorded by the tribunals warrant interference under Section 62 of the Code. 

ARGUMENTS OF THE PARTIES 

The Appellants argued that they are financial creditors of the CD based on Corporate Guarantees and a Deed of Hypothecation. It was contended that liabilities arising from corporate guarantees strictly constitute a “financial debt” under Section 5(8) of the IBC. They contended that the guarantees were properly executed in New Delhi, appropriately stamped according to Delhi rates, and physically verified by the RP. They further argued that the retrospective NPA classification was strictly in accordance with RBI Master Circulars regarding restructured assets. The findings of NCLT and NCLAT were perverse, and the issue is already settled by Supreme Court judgments. 

The Respondents argued that the corporate guarantees were non-existent, invalid, and unenforceable in law. They contended that the timing of the guarantees was highly suspicious since the corporate debtor was already in default. Furthermore, they emphasised that the guarantees were deliberately withheld from the NCLT, were insufficiently stamped under Maharashtra law, and were never disclosed in the Corporate Debtor’s financial statements for the relevant years. It was contended that the Tribunals have recorded the concurrent findings of fact and hence, no interference in this appeal was needed. 

JUDGEMENT AND ANALYSIS 

The Supreme Court strongly disagreed with the tribunals below and allowed the appeal, terming the findings of the NCLT and NCLAT as glaringly perverse. The Court ruled that a liability arising from a corporate guarantee squarely falls within the ambit of “financial debt” under Section 5(8) of the IBC, reiterating that a guarantor’s liability is coextensive with that of the principal borrower.

Addressing the timing of the guarantees, the Court noted that the retrospective NPA classification was a mandatory statutory requirement under the RBI Master Circular of 2015 for restructured assets. Therefore, executing the guarantees before the final NPA declaration was entirely lawful. Regarding the non-disclosure of the guarantees in the Corporate Debtor’s financial statements, the Court held that a debtor’s failure to disclose cannot legally deprive a creditor of its rightful claim; at best, it is a default committed by the corporate debtor itself.

Crucially, on the issue of stamping, the Court relied on recent Constitution Bench precedent to hold that non-stamping or improper stamping is merely a curable defect that does not render an instrument void or invalid. The Court noted that the Stamp Act is a fiscal measure to secure state revenue, not a weapon for litigants to defeat an opponent’s legitimate cause. Finally, the Court found that the RP had indeed physically verified the guarantees in New Delhi, making the NCLAT’s contrary finding factually perverse.

CONCLUSION 

The Supreme Court concluded that the NCLT and NCLAT committed manifest errors by rejecting the consortium’s valid claims at the behest of another lender by highlighting the fact that merely because the corporate guarantees were not filed along with Form-C, the claim of the appellants could not have been negated. The Court quashed and set aside the orders of both tribunals, officially recognising the SBI Consortium as “financial creditors” of the Corporate Debtor. The Resolution Professional was directed to reconstitute the Committee of Creditors (CoC) by including the appellants and to proceed with the corporate insolvency resolution process in accordance with the law.