The Bombay High Court on Friday dismissed a writ petition filed by industrialist Anil Ambani against the State Bank of India (SBI), which had classified the loan account of Reliance Communications (RCom) as “fraud.” The ruling was delivered by a division bench comprising Justices Revati Mohite Dere and Neela Gokhale, who orally observed that the petition lacked merit. The detailed order is expected to be uploaded shortly.
The decision comes after SBI, in an order dated June 13, 2025, declared Ambani’s account fraudulent and announced it would report the matter to the Reserve Bank of India (RBI).
Ambani’s Arguments: Violation of Natural Justice
Ambani, in his petition, claimed that SBI’s classification of the account amounted to a breach of principles of natural justice. He argued that he was not granted a personal hearing and was denied access to critical documents that the bank had relied upon in its decision-making.
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Senior counsel Darius Khambata, representing Ambani, submitted that SBI’s show-cause notice issued on December 20, 2023, was followed by an incomplete report, preventing Ambani from presenting a fair defense. He further argued that such classification carried “drastic civil consequences” and should not have been done arbitrarily.
SBI’s Stand: No Response to Notices
In its counter, SBI informed the court that both RCom and Anil Ambani were issued notices, directing them to file written submissions within 15 days to explain why the account should not be declared as fraud. According to the bank, no satisfactory explanation was provided, prompting the classification.
SBI further maintained that its actions were in line with RBI guidelines on fraud classification and reporting.
Next Legal Steps
A spokesperson for Ambani stated after the hearing:
“We are awaiting the order. Once we have reviewed it, we will evaluate the next course of action, as legally advised.”
With the High Court rejecting his plea, Ambani is expected to move the Supreme Court for relief.
Notably, in July 2025, Ambani had filed a similar petition against Canara Bank after it moved to classify the RCom loan account as fraud. In that case, the bank withdrew its order during the proceedings.
Broader Context: Regulatory Pressure on NPAs
The development highlights the increasing scrutiny of high-value non-performing assets (NPAs) by public sector lenders. Classification of accounts as “fraud” has significant consequences, including regulatory reporting, credit restrictions, and reputational damage for borrowers.
For Ambani, whose telecom venture RCom has been at the center of protracted insolvency proceedings, the Bombay HC’s dismissal underscores the tightening legal and regulatory stance against corporate borrowers accused of misrepresentation or fund diversion.
