Bombay High Court Dismisses Anil Ambani's Petition, Upholds SBI's 'Fraud' Tag On RCom Loan

The Bombay High Court on Friday dismissed a writ petition filed by industrialist Anil Ambani challenging State Bank of India's decision to classify Reliance Communications Ltd.'s loan account as "fraud," reported Live Law.

SBI's June 13 order designated RCom's account as fraudulent and directed that Ambani, its erstwhile non-executive director, be reported to the Reserve Bank of India under fraud risk management guidelines. Aggrieved, Ambani approached the high court in July alleging violation of principles of natural justice, arguing that he was not granted a personal hearing and denied key documents.

"Such classification… has drastic civil consequences," his plea stated, calling SBI's action arbitrary and lacking transparency. The bank cited RBI's July 2016 Master Directions on Fraud Risk Management and its internal policy.

A division bench of Justices Revati Mohite Dere and Neela Gokhale orally observed that the petition lacked merit and dismissed it. The detailed order will be uploaded later. Ambani may now approach the Supreme Court. His spokesperson said, "We are awaiting the order. Once reviewed, we will evaluate the next course of action, as legally advised."

Appearing for Ambani, senior counsel Darius Khambata argued that SBI furnished only an incomplete report in response to its December 2023 showcause notice, and that critical documents were provided belatedly. On August 12, the HC had granted him time to produce the documents on which reliance was sought.

SBI's counsel Aspi Chinoy and RBI's counsel Venkatesh Dhond opposed the plea, stressing that repeated notices were served on Ambani but no satisfactory explanation was offered.

In a related matter, Canara Bank earlier withdrew its order classifying RCom's account as "fraudulent" after Ambani filed a similar petition.

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