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SC refuses to entertain Anil Ambani’s plea against ‘fraud’ tag
Ambani also told the court that he was willing to explore a settlement with the banks, a submission that the bench recorded while clarifying it had expressed no opinion on the proposal.
The Supreme Court on Thursday declined to entertain industrialist Anil Dhirubhai Ambani’s challenge to the classification of loan accounts of Reliance Communications group companies as “fraud”, underlining serious allegations of siphoning and diversion of “thousands of crores” of public money and asking him to pursue remedies before the civil court where a related suit is pending.
Ambani also told the court that he was willing to explore a settlement with the banks, a submission that the bench recorded while clarifying it had expressed no opinion on the proposal.
A bench led by Chief Justice of India Surya Kant, also comprising justices Joymalya Bagchi and Vipul M Pancholi, said it was not inclined to intervene at this stage since the main dispute was yet to be finally adjudicated. “It is a case of siphoning money… We do not want to express any opinion at this stage. You have legal avenues available,” the bench observed, referring to allegations involving shell entities and diversion of funds.
The court made it clear that Ambani’s attempt to challenge the fraud classification on what it termed a “technical objection”, relating to the eligibility of the forensic auditor, could not be examined in isolation when substantive issues were already pending before a civil forum. “Whether it can vitiate everything or not, it is for you to prove in the suit,” the bench told senior advocate Kapil Sibal, who appeared for Ambani.
Sibal argued that the audit report forming the basis of the fraud classification was invalid since it had not been prepared by a qualified chartered accountant and that such proceedings would result in “civil death” by cutting off access to finance. He also urged the court to intervene, pointing out that civil proceedings could take years to conclude.
The bench, however, noted that the Bombay high court’s division bench had already examined the issue on merits in its February order and recorded findings on diversion of funds, while also recognising “substantial compliance” with regulatory requirements in the appointment of the auditor. It declined the request for a fresh forensic audit, observing that courts should not substitute their judgment for that of banks unless there is clear evidence of unfairness.
Senior advocate Shyam Divan, appearing in a connected matter, reiterated the challenge to the auditor’s qualifications, calling it a “fatal flaw”. But the court held that banks are best placed to decide who should conduct audits. “It was their money… they should know the best about audits,” the bench remarked, while adding that Ambani could raise all such issues, including the auditor’s eligibility, before the civil court.
In another petition relating to IDBI Bank, senior advocate Narender Hooda sought a post-decisional hearing for Ambani, but the court rejected the contention, noting that principles of natural justice had been followed, including a personal hearing before fraud classification. Solicitor general Tushar Mehta, appearing for public sector banks, opposed the pleas.
While dismissing the petitions, the court clarified that the Bombay HC’s observations would not prejudice the civil suit and that Ambani would be free to raise all available grounds before the trial court. It also urged expeditious disposal of the suit.
The case originates from a forensic audit report of October 2020 that flagged alleged irregularities of around ₹31,580 crore across entities of the Anil Dhirubhai Ambani Group (ADAG). Based on this, multiple banks initiated fraud classification proceedings, eventually declaring Ambani a “fraud” borrower in September 2025.
The Supreme Court’s refusal to intervene comes amid intensifying criminal investigations into alleged large-scale bank fraud involving ADAG companies. The Central Bureau of Investigation, in a case based on a complaint by Bank of Baroda, has alleged a loss exceeding ₹2,200 crore linked to loans taken by Reliance Communications, claiming funds were diverted through fictitious transactions.
Separately, the Enforcement Directorate on Wednesday arrested two former group executives in a money laundering probe linked to Reliance Home Finance and Reliance Commercial Finance, alleging routing of funds through shell entities.
In a related public interest litigation, the Supreme Court has been monitoring a broader probe into alleged irregularities exceeding ₹40,000 crore involving ADAG entities, stressing the need for a fair, transparent and time-bound investigation.
