Bombay HC dismisses Anil Ambani’s plea against SBI’s ‘fraudulent loan’ tag

The Bombay High Court has dismissed a writ petition filed by industrialist Anil Ambani against the State Bank of India’s (SBI) decision to classify his loan accounts as “fraudulent”.

Anil Ambani’s plea was directed at SBI’s June 2025 order tagging the loan accounts of Reliance Communications (RCom) and its former director, Anil Ambani, as “fraudulent”.

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A bench comprising Justice Revati Mohite Dere and Justice Neela Gokhale ruled against Anil Ambani on Friday and held that SBI acted as per banking regulator Reserve Bank of India’s (RBI) directions.

The bench rejected Ambani’s contention that principles of natural justice were violated. He argued that SBI denied him a personal audience, failed to share documents relied upon, and acted arbitrarily.

“Such classification of declaring the account of the petitioner as fraud has drastic civil consequences,” Ambani had stated in his petition. He had argued that as a non-executive director of RCom, he was unfairly targeted without following due legal process.

However, SBI’s lawyer told the court that it had issued a show cause notice in December 2023, seeking an explanation within 15 days. The SBI submitted that repeated notices were served, but no satisfactory response came from Anil Ambani.

The SBI said the decision was taken under the July 2016 RBI Master Directions on Fraud Risk Management, as well as its internal policy. Senior counsel Aspi Chinoy, who appeared for SBI, argued that due procedure was followed by SBI. RBI was also named as a respondent in the case, and was represented by senior counsel Venkatesh Dhond.

Senior counsels Darius Khambata and Prateek Seksaria, who represented Anil Ambani, argued that the SBI provided incomplete reports and delayed sharing key documents, undermining his ability to defend himself. Counsel Khambata told the court that even after requests, the information was furnished very late.

Despite these claims, the bench observed that the petition lacked merit and proceeded to dismiss it.

The SBI’s order classifying the loan accounts of Reliance Communications (RCom) and its former director, Anil Ambani, as “fraudulent” has significant consequences. As soon as a loan account is marked as “fraudulent”, banks are duty bound as per law to report it to the RBI immediately and initiate criminal investigations accordingly.

It may be recalled that in Anil Ambani’s case, the SBI has already informed the RBI, after which the Central Bureau of Investigation (CBI) began investigations.