SC notice to Centre, CBI, ED and Anil Ambani on PIL for court monitored probe into bank fraud

A bench heard advocate Prashant Bhushan, on behalf of Sarma, and sought replies within three weeks on allegations of bank fraud worth Rs 20,000 crore.

New Delhi: The Supreme Court on Tuesday issued notice to the Centre, CBI, ED on a PIL by former government secretary E A S Sarma, for a court-monitored probe into the alleged large-scale bank fraud perpetrated by Anil Dhirubhai Ambani Group (ADAG), its Chairman Anil Ambani, Reliance Communications (RCom), and related entities.

A bench of Chief Justice of India B R Gavai and Justice K Vinod Chandran heard advocate Prashant Bhushan, on behalf of Sarma, and sought replies within three weeks on allegations of bank fraud worth Rs 20,000 crore. 

The plea sought court directions for the constitution of a special investigation team comprising officers from the CBI and the ED to conduct a thorough, impartial, and time-bound investigation into the alleged bank fraud.

It also sought investigation into the affairs of the ADAG, its promoters, directors, and connected entities be monitored by the top court, so as to ensure a fair, independent, and comprehensive probe which is free from external influences.

In his petition, Sarma stated that the FIR, registered by the CBI on August 21, 2025 and the connected ED proceedings cover only a fraction of the alleged wrongdoing, and deliberately excluded the role of bank officials, public servants and regulators despite detailed forensic audits and independent reports pointing to widespread fraud.

The PIL also stated that the findings of systematic fraud and diversion of funds has been judicially affirmed by a decision of the Bombay High Court.

The petition claimed, RCom and its subsidiaries - Reliance Infratel and Reliance Telecom – had received loans amounting to Rs 31,580 crore between 2013 and 2017 from a consortium of banks led by State Bank of India. 

A forensic audit commissioned by SBI allegedly revealed substantial diversion of funds, including thousands of crores used to repay unrelated loans, transfers to related parties, investments in mutual funds and fixed deposits that were immediately liquidated, and complex circular routing of money to disguise evergreening of loans, it claimed.

The plea alleged that the audit also noted transactions recorded from bank accounts that had been confirmed as closed, raising concerns of fabrication of financial statements.

It claimed that several shell entities and dubious corporate structures - such as Netizen Engineering and Kunj Bihari Developers - were allegedly used to siphon and launder loan funds. It also referred to instances where subsidiaries were used to write off large liabilities through sham preference-share arrangements, allegedly causing losses of over Rs 1,800 crore.

According to Sarma, the investigating agencies, in the present matter, have overlooked the five-year delay in filing the FIR report by SBI, which clearly indicates involvement of bank officials and other public servants whose conduct enabled, concealed, or facilitated the fraud. 

Despite being in possession of the 2020 forensic audit report, based on which the complaint was filed and which contains details about issues regarding diversion, evergreening, fictitious transactions, and use of shell entities, SBI chose to take no statutory action until August 2025, the petitioner alleged.

The delay in filing the first information report cannot be explained without examining whether officers of the bank acted in collusion or with deliberate intent to shield the borrower group, the PIL contended.

“Despite material indicating frauds aggregating to more than Rs 20,000 crore and searches conducted across over 35 premises, no arrests have been made, no assets have been seized and no accounts have been frozen, indicating difficulty on part of the investigating agencies and necessitating judicial supervision,” Sarma said.

"The trajectory of the ADA Group under Respondent No. 5 (Anil Ambani) confirms a pattern of chronic financial destruction, personal legal liability, and colossal public wealth erosion, which cumulatively underscores the necessity for comprehensive criminal investigation," the plea claimed.

It cited a Cobra post report allegedly revealing that since the formation of the Reliance ADA Group, the combined market capitalization declined dramatically, resulting in investors losing Rs 1,59,721 crore of their wealth by June 2019, from a high of Rs 1,65,917 crore in January 2008.

The PIL further pointed to allegations of offshore fund diversion amounting to tens of thousands of crores through multiple layers of shell entities, special purpose vehicles and companies incorporated in foreign jurisdictions such as Mauritius, Cyprus and the British Virgin Islands. 

The petitioner claimed, these structures were repeatedly renamed, re-registered and eventually merged into promoter-controlled entities to obscure the money trail. The petition claimed that such complex cross-border transactions point to possible violations of the Foreign Exchange Management Act and the Prevention of Money Laundering Act.