Legal Analysis: State Bank of India & Ors. vs. Doha Bank Q.P.S.C. & Anr

Citation: 2026 INSC 423
Court: Supreme Court of India
Bench: Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe (Division Bench)
Judgment Author: Justice Alok Aradhe
Date of Decision: April 28, 2026
Nature of Judgment: Civil Appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 against order of the National Company Law Appellate Tribunal (NCLAT).

Synopsis of the Judgment

The appellants (a consortium of banks led by State Bank of India) extended rupee loan facilities to Reliance Infratel Limited (RITL) and its group entities. RITL executed corporate guarantees in favour of the consortium to secure the loans. When the corporate debtor entered CIRP, the appellants submitted their claims as financial creditors. Doha Bank (another creditor) objected, contending that the guarantees were invalid due to their timing (executed when the debtor was already in default), non-disclosure in financial statements, improper verification, and insufficient stamping. The NCLT and NCLAT rejected the appellants’ claims. The Supreme Court reversed, holding that a liability arising from a corporate guarantee squarely falls within the definition of “financial debt” under Section 5(8) of the IBC. The Court held that the execution of the guarantees was admitted by the corporate debtor, the timing was justified by RBI circulars on restructuring, the verification by the Resolution Professional was adequate, and insufficient stamping is a curable defect that does not invalidate the instrument. The findings of the tribunals were held to be perverse, and the appeal was allowed.

1. Basic Information of the Judgment

Field Details Case Title State Bank of India & Ors. vs. Doha Bank Q.P.S.C. & Anr. Civil Appeal No.8527 of 2022 Bench Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe Judgment Author Justice Alok Aradhe Date of Decision April 28, 2026 Citation 2026 INSC 423 Appeal From Order dated 14.10.2022 of NCLAT, Principal Bench, New Delhi, affirming order dated 02.03.2021 of NCLT, Mumbai Bench

2. Legal Framework

Laws Involved:

• Insolvency and Bankruptcy Code, 2016 (IBC): Section 5(7) (financial creditor), Section 5(8) (financial debt – includes liability under a guarantee for money borrowed against payment of interest), Section 7 (initiation of CIRP by financial creditor), Section 43 (preferential transactions), Section 45 (undervalued transactions), Section 66 (fraudulent trading), Section 62 (appeal to Supreme Court).

• Companies Act, 2013: Section 186 (loan to directors and related party transactions), Section 85 (guarantees by holding company – not applicable here).

• RBI Master Circular on Prudential Norms (01.07.2015): Clause 17.2.6 – for restructured assets that become NPA again, asset classification is reckoned from the date it first became NPA.

• Maharashtra Stamp Act, 1958: Provisions relating to stamp duty on instruments executed in Maharashtra.

• Indian Stamp Act, 1899: General principles on curable defects in stamping.

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