HC restrains Bank of Baroda from acting on Anil Ambani firm’s ‘fraud’ tag

A division bench of Justice Riyaz Chagla and Justice Farhan Dubash directed the bank not to act on the impugned order until the next hearing, scheduled for September 24

MUMBAI: In a temporary reprieve for industrialist Anil Ambani, the Bombay High Court on Wednesday restrained the Bank of Baroda from taking any coercive steps, pursuant to its September 4 order declaring Reliance Communications’ loan accounts as “fraud.”

Mumbai, India - September 03, 2021: Bombay High Court at Fort, in Mumbai, India, on Friday, September 03, 2021. (Photo by Anshuman Poyrekar/Hindustan Times) (Anshuman Poyrekar/HT PHOTO)

A division bench of Justice Riyaz Chagla and Justice Farhan Dubash directed the bank not to act on the impugned order until the next hearing, scheduled for September 24.

“As the Bank has sought time to file an affidavit in reply to the present petition, the counsel for the Bank states, on instructions, that it will not act in furtherance of the impugned notice till Wednesday (September 24). The Bank is to file its reply by September 23. Till then, there will not be any coercive action,” the bench said.

Ambani had moved the high court to challenge the Bank’s decision, which cited diversion of loan funds, misutilization of borrowings, unauthorised transactions, and irregular use of inter-corporate deposits as grounds for classifying the accounts as fraudulent. Reliance Communications informed the stock exchanges about this on September 4, 2025

Appearing for Ambani, senior advocate Navroz Seervai argued that the forensic report prepared by BDO was commissioned by State Bank of India (SBI) as the lead lender of a consortium of banks. He submitted that Bank of Baroda was not part of that consortium and therefore had no authority to initiate such proceedings, rendering its action illegal.

The bench observed that the Bank must be given an opportunity to present its case through an affidavit. While Seervai pressed for interim relief, counsel for Bank of Baroda pointed out that the Bank had already intimated the Reserve Bank of India (RBI) of its decision, in line with the Master Circular on fraud classification.

The Bank further contended that SBI had already reported Ambani’s accounts as fraud to the Central Bureau of Investigation (CBI), and the agency had written to Bank of Baroda seeking details. “The petitioner fears we may approach the CBI, but SBI has already done so. I cannot be prevented from giving details to the CBI,” the Bank’s counsel submitted.

The bench, however, directed that no further steps be taken under the September 4 order until the matter is heard again next week.