Mumbai, October 7, 2025 – The Bombay High Court has upheld the State Bank of India (SBI)’s order classifying industrialist Anil Ambani and his company Reliance Communications (RCom)’s accounts as fraudulent. A division bench comprising Justice Revati Mohite Dere and Justice Neela Gokhale rejected Ambani’s petition on October 3, stating that SBI’s order is reasoned, valid, and free of legal defects.
Ambani had contended that he was not given a personal hearing and was denied access to relevant documents, claiming the order was therefore illegal. However, the court clarified that under RBI Master Directions, SBI was only required to provide the Right to Representation and was not obliged to grant a personal hearing.
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The bench noted that Ambani had responded to the show-cause notice issued by SBI last year. When no satisfactory response was received for the final notice, the bank declared his and the company’s accounts as fraudulent. The court further observed that Ambani never requested a personal hearing.
Regarding principles of natural justice, the High Court stated that Ambani was given ample opportunity to submit his objections in writing, making SBI’s order just and legally sound.
Ambani’s argument that he was not a whole-time director of the company and therefore his account should not have been classified as fraudulent was dismissed. The court clarified that when a company’s account is declared fraudulent, its promoters or directors exercising control are also held accountable. SBI maintained that Ambani exercised control over Reliance Communications.
SBI also highlighted that the company had misused bank funds in violation of its loan agreements. Earlier this year, the bank filed a complaint with the Central Bureau of Investigation (CBI), claiming a loss of Rs 2,929.05 crore due to alleged misappropriation.
The High Court emphasized that under RBI Master Directions, providing notice, making documents available, and allowing a chance to respond is sufficient; a personal hearing is not mandatory.
This ruling confirms that SBI’s order is legally robust and fair while reinforcing the responsibility of promoters and directors for the management of company accounts.
