New Delhi: The Supreme Court on Thursday refused to interfere with the Bombay High Court’s order vacating the interim protection granted to industrialist Anil Ambani against the classification of his loan accounts as “fraudulent” by lender banks under the Reserve Bank of India’s 2024 Master Directions.
A Bench of Chief Justice of India (CJI) Surya Kant and Justices Joymalya Bagchi and Vipul Pancholi dismissed Ambani’s petitions challenging the Bombay High Court’s division bench judgment, which had set aside the interim stay granted by a single judge in his favour.
However, the apex court clarified that the observations made by the Bombay High Court would have no bearing on the final adjudication of Ambani’s civil suits challenging the fraud classification proceedings.
It also directed expeditious trial of the pending suits, subject to cooperation by the parties, while leaving all other remedies available in law open to Ambani.
During the hearing, senior advocate Kapil Sibal, appearing for Ambani, argued that fraud classification would amount to a “virtual civil death” and submitted that such interim protection could not have been vacated in the manner done by the Division Bench.
“I have been called a fraud. This is a virtual civil death, nobody will lend money…” Sibal submitted.
However, the CJI-led Bench was not persuaded to grant relief, observing that serious allegations involving diversion and siphoning of public funds were under investigation.
Sibal contended that the forensic audit relied upon by the banks was legally unsustainable as it had not been conducted by an auditor qualified under the applicable statutory framework and the RBI’s 2024 Master Directions.
Questioning whether the top court could substitute its own view for that of the lenders, the bench observed: “Nationalised banks have engaged the services. They know the best person, can we substitute their wisdom? It is their money!”
Solicitor General Tushar Mehta submitted that the forensic report had been prepared by a reputed professional entity engaged by the consortium of lenders through a transparent process.
The dispute arises out of lender banks’ reliance on a forensic audit report dated October 15, 2020, prepared by BDO India LLP in relation to loans extended to Reliance Communications and related entities.
In December 2025, a single-judge bench of the Bombay High Court had stayed further action by banks on the forensic report and related show-cause notices, holding prima facie that the forensic audit was not in consonance with the RBI Master Directions and that the consequences of fraud classification could have severe civil ramifications. However, the division bench subsequently vacated that interim protection after holding that the single judge had erred in reading the 2024 RBI Master Directions retrospectively and in questioning the validity of the 2020 forensic audit on that basis.
A Bench of Chief Justice Shree Chandrashekhar and Justice Gautam A. Ankhad accepted the banks’ contention that the forensic audit had been commissioned under the 2016 regulatory framework and that the later 2024 Directions could not automatically invalidate prior actions.
Ambani has filed civil suits before the Bombay High Court seeking declarations that the forensic audit report and consequential fraud classification actions are illegal, non-est and contrary to law, besides claiming damages.
(IANS)
