In a major setback for industrialist Anil D. Ambani, the Bombay High Court has set aside a December 2025 interim order that had restrained three public sector banks from pursuing fraud classification proceedings against him based on a 2020 forensic audit report.
A Division Bench comprising Chief Justice Shree Chandrashekhar and Justice Gautam A. Ankhad allowed appeals filed by Bank of Baroda, IDBI Bank, Indian Overseas Bank, and forensic auditor BDO India LLP. The bench described the single-judge order as “perverse,” “illegal,” and based on flawed assumptions, including retrospective application of the RBI’s 2024 Master Directions on fraud risk management.
The dispute stems from a forensic audit report dated October 15, 2020, prepared by BDO India LLP on Reliance Communications Ltd (RCOM) and its group entities. The report alleged diversion of loan funds amounting to over ₹31,580 crore, including payments to related parties and misuse of funds. Banks had relied on this to issue show-cause notices and classify accounts as fraud under the RBI’s earlier 2016 Master Directions.
In December 2025, a single-judge bench had granted interim relief to Ambani, staying all actions by the banks on grounds that the report was invalid—citing lack of qualification by the signatory (not a registered Chartered Accountant), absence of UDIN, and non-compliance with the 2024 directions’ Footnote-14 requiring audits by qualified professionals under relevant statutes.
The Division Bench overturned this, ruling that:
- The 2024 RBI Master Directions operate prospectively and do not invalidate actions taken under the 2016 guidelines.
- The 2016 directions permitted banks to engage external auditors or forensic experts (no mandatory requirement for a practicing ICAI-registered CA).
- Ambani’s challenge was delayed; he had access to the report since 2020–2021 but raised key objections only later.
- No prima facie case, balance of convenience, or irreparable injury warranted the stay, which could undermine the banking system’s fraud detection framework.
The court lifted the stay, allowing the banks to continue show-cause proceedings, fraud declarations, and related actions. The suits filed by Ambani challenging the report and notices remain pending but without interim protection.
This ruling comes amid parallel probes by the Enforcement Directorate (ED) into alleged money laundering linked to the same Reliance Group entities (RCOM, Reliance Home Finance Ltd, Reliance Commercial Finance Ltd, and others). The ED has attached assets worth over ₹12,000 crore cumulatively since late 2025, including fresh attachments of ₹1,885 crore in January 2026. Earlier tranches (November 2025 onwards) included high-profile properties such as Ambani’s family residence in Mumbai’s Pali Hill, the Reliance Centre in Delhi, and multiple residential/commercial holdings across cities like Mumbai, Delhi, Noida, Pune, Hyderabad, and Chennai. These attachments, under the Prevention of Money Laundering Act (PMLA), stem from allegations of fraudulent diversion of public funds and are separate from the RBI-led fraud classification process.
Ambani and his group companies have consistently denied wrongdoing. The ED actions aim to preserve assets pending further investigation, while the banks’ proceedings could lead to broader restrictions on credit access and reputational consequences.
The Bombay High Court emphasized that public interest in protecting banking funds outweighs interim restraint in such cases.
