- Decisive judgment of Bombay High Court
- Cancellation of interim relief; Court permission to action by banks
- The process of declaring fraudulent accounts resumes
Anil Ambani News: Industrialist Anil Ambani has faced a legal setback. The Bombay High Court on Monday delivered a landmark judgment, quashing the interim relief barring banks from taking action against them for fraud. The decision now clears the way for banks to classify their accounts as fraudulent.
The controversy started when State Bank of India (SBI) and other banks issued ‘show cause’ notices to Anil Ambani’s companies. Based on the errors found in the audit reports, the banks started the process of declaring their accounts fraudulent. Ambani appealed to the court, after which a single bench stayed the banks’ action in December 2025.
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A bench of the Bombay High Court declared the earlier order of the single bench “legally flawed”. The Court vehemently held that if an order is found to be prima facie wrong, it would not be justified to continue it further. Ambani’s lawyers had requested a four-week stay on the decision so that they could appeal to the High Court, but the High Court rejected the request outright.
Anil Ambani’s main contention was that the banks’ actions did not follow the principles of natural justice and that he was not given adequate opportunity to present his case. However, the RBI amended its Master Circular in 2024 to clarify that it is mandatory to give the parties an opportunity of individual hearing before declaring any account fraudulent. However, in the present case, the court declined to continue the relief, considering the technical reasons and the seriousness of the audit report.
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Now, State Bank of India (SBI), along with other concerned banks and audit firms, can start the process again. If the accounts are officially declared ‘fraudulent’, it will become more difficult for Anil Ambani and his companies to avail banking facilities in future.
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