In a significant development, the Bombay High Court has quashed a single-judge interim order that had stayed fraud classification proceedings against industrialist Anil Ambani and Reliance Communications Ltd (RCom).
A division bench comprising Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad termed the earlier interim order “illegal and perverse” while allowing appeals filed by three public sector banks and audit firm BDO India LLP.
The appeals were filed by Indian Overseas Bank, IDBI Bank, and Bank of Baroda, challenging a December 2025 order that had granted interim relief to Ambani and RCom.
The earlier single-bench ruling had stayed all present and future action by the banks to classify the accounts as “fraud,” observing that the action was based on a legally flawed forensic audit and allegedly violated mandatory guidelines of the Reserve Bank of India (RBI). The judge had also remarked that the banks appeared to have “woken up from deep slumber” after several years.
Ambani had challenged the show-cause notices issued by the banks, arguing that the forensic audit conducted by BDO LLP was invalid. He contended that the firm was not qualified to carry out the audit, as its signatory was not a chartered accountant, and claimed that BDO was an accounting consultancy rather than a statutory audit firm.
However, the banks argued before the division bench that the forensic audit was legally sound and revealed serious findings of fund siphoning and misutilization. They maintained that the interim stay was unjustified and sought its reversal.
With the division bench setting aside the stay, proceedings to classify the accounts as fraud can now continue. Ambani’s counsel requested a stay on the latest order to enable an appeal before the Supreme Court, but the court declined the request.
The ruling marks a setback for Ambani and clears the way for banks to proceed with action under RBI norms.
Anil Ambani Faces Renewed Fraud Proceedings as HC Sets Aside Stay
