MUMBAI: The Bombay High Court on Tuesday allowed industrialist Anil Ambani to withdraw his plea against IDBI Bank’s move to classify his loan account as “fraud.” The court, however, directed him to raise his objections in the upcoming personal hearing, which will proceed as scheduled later this month.
A Legal Pause, Not an End
In a brief but significant order, Justice Sandesh Patil of the Bombay High Court’s vacation bench permitted Anil Ambani to withdraw his petition against IDBI Bank, which had issued a show-cause notice under the Reserve Bank of India’s (RBI) Master Directions on Fraud Risk Management. Ambani’s plea sought to restrain the bank from conducting a personal hearing until all materials relied upon in the case were disclosed to him.
Justice Patil noted his reluctance to intervene at this stage but allowed Ambani to pursue his claims “under protest” before the bank’s adjudicating authority. The court emphasized that Ambani was free to raise all his contentions before an appropriate forum if an adverse order followed.
The Dispute Over ‘Incomplete’ Material
Ambani’s petition stemmed from the forensic audit report that triggered IDBI Bank’s decision to initiate fraud proceedings against him. He argued that the bank’s reliance on materials not fully shared with him was procedurally unfair and risked causing him “grave prejudice.” According to his counsel, without access to all documents and evidence used in forming the bank’s opinion, any personal hearing would violate principles of natural justice.
The petition requested that the bank be restrained from proceeding until full disclosure was made—a request the court stopped short of granting.
IDBI’s Stand: ‘All Documents Were Shared’
The bank, represented through counsel, countered that it had already provided Ambani with every relevant document, including the forensic audit report. It stated that multiple opportunities had been offered for Ambani to attend a personal hearing, but he had not availed of them.
The bank’s counsel emphasized that the process followed RBI’s directions, which require banks to identify fraudulent borrowers based on audit findings and internal assessments. IDBI maintained that its actions were in line with regulatory mandates and that the upcoming personal hearing, scheduled for October 30, would give Ambani another chance to defend his case.
What Lies Ahead
The withdrawal of the petition, while procedural, marks an important development in a broader legal and financial dispute between Ambani and the banking system. The court’s order effectively reinstates the regulatory process under the RBI’s framework, leaving Ambani to contest the fraud classification directly before the bank.
