SBI order classifying Anil Ambani, Reliance Communications accounts as fraud has no infirmity: HC

The Bombay High Court whereas upholding an order of the State Bank of India (SBI) classifying the accounts of industrialist Anil Ambani and Reliance Communications as fraud has stated it was a reasoned order, and didn’t have any authorized flaw.

A bench of Justices Revati Mohite Dere and Neela Gokhale on October 3 dismissed a petition filed by Ambani, difficult the SBI order.

The judgment, a replica of which was made obtainable on Tuesday, stated there was no advantage in Ambani’s plea as there was no “infirmity” within the SBI order of June 13, 2025.

The court docket didn’t entertain the industrialist’s rivalry that the order ought to be held as null and void as a result of he was not given a private listening to, and related paperwork weren’t furnished to him.

The proper obtainable beneath the Reserve Bank of India‘s (RBI) Grasp Instructions, beneath which the SBI handed its order, is that of constructing a illustration and never of non-public listening to, the excessive court docket famous.

Ambani had submitted his response to the show-cause discover issued by the SBI final 12 months, and solely when there was no response to the final communication, the financial institution handed the order classifying the account as fraud, the court docket stated.Additional, Ambani by no means made any request for a private listening to, it famous.The ideas of pure justice can’t be utilized in a straitjacket components, the court docket stated including within the current case Ambani was afforded an ample alternative to submit his objections in writing.

“Therefore, the requirement of equity and compliance with the precept of pure justice, stood happy,” the court docket held.

Ambani had challenged the June order of the SBI classifying the account of Reliance Communications and his personal account as fraud by way of the ‘Grasp Instructions on Fraud Danger Administration in Industrial Banks (together with Regional Rural Banks) and All India Monetary Establishments.’

The excessive court docket famous that the financial institution had issued a show-cause discover to Ambani final 12 months. However he did not reply to the discover and continued to hunt paperwork, resulting in SBI lastly passing the order.

Anil Ambani claimed in his petition that he was not given a private listening to and never supplied with the related paperwork. Therefore, the order was unlawful, he argued.

He additionally claimed that he was not a whole-time director of the corporate, and therefore his account mustn’t have been labeled as fraud.

However the excessive court docket stated that when an organization’s account is said to be a fraud account, the promoters/ administrators who have been in command of the corporate are additionally responsible for penal measures. It may very well be seen that Anil Ambani exercised management over Reliance Communications, the HC stated.

SBI claimed earlier than the excessive court docket that as per the RBI’s Grasp Instructions round, no private listening to was required to be given.

The bench, after going by way of the round and earlier Supreme Court docket judgments, stated the ideas of pure justice demand that debtors should be served a discover, furnished with all paperwork, and allowed to submit their illustration.

“The proper contemplated is one among illustration, not essentially of non-public listening to,” HC stated.

SBI had accused Reliance Communications of misappropriation of financial institution funds by coming into into transactions that violated the phrases of its loans.

The financial institution additionally lodged a criticism earlier this 12 months with the Central Bureau of Investigation (CBI) which searched premises linked to Reliance Communications and Ambani’s residence.

The central company registered a criticism after SBI claimed a lack of Rs 2,929.05 crore, ensuing from alleged misappropriation by Reliance Communications and Anil Ambani.