Supreme Court rejects Anil Ambani's plea against declaration of banks accounts as fraudulent

New Delhi: The Supreme Court on Thursday dismissed the pleas of beleaguered industrialist Anil Ambani against the Bombay High Court order that allowed the proceedings initiated by banks against him and Reliance Communications Ltd to classify their bank accounts as fraudulent to continue as per the RBI's mandate.

A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi, however, allowed Ambani to pursue his plea before the high court's single judge bench against the banks' show cause notices to declare the accounts as fraudulent.

The bench asked the single-judge bench to expeditiously decide Ambani's plea against the show cause notices issued by three banks. The apex court passed the order while hearing three separate pleas filed by Ambani, who had challenged a February 23 order of a division bench of the high court.

Senior advocate Kapil Sibal, appearing for Ambani contended the interim relief cannot be ordinarily reversed unless it is found as perverse or grossly egregious. He said the interim relief cannot be reversed in such a fashion, as the fraud classification will amount to a virtual "civil death." "Nobody will lend money to him," he said.

The bench, however, pointed out that the investigations were going on by the CBI and the ED. To this, Sibal contended criminal investigations can proceed but the classification of accounts must be interfered with.

"It is a case of siphoning of, we can't really express any opinion as we don't want to prejudice," the bench said.

Sibal submitted the classification was not done on the basis of a forensic audit in conformity with the statutory requirements.

The bench, however, pointed out, there was a finding of diversion of funds.

Solicitor General Tushar Mehta opposed the plea.

The division bench had quashed a single judge bench interim order that stayed proceedings initiated against him and Reliance Communications Ltd to classify their bank accounts as fraud. The division bench had allowed the appeals filed by three public sector banks and the auditor firm BDO India LLP against the December 2025 interim order passed by a single bench.

The single judge bench order had stayed all present and future action by Indian Overseas Bank, IDBI Bank and Bank of Baroda, noting that the action was based on a legally flawed forensic audit and violated the Reserve Bank of India's mandatory guidelines.

Ambani challenged before the single bench show-cause notices issued by the Indian Overseas Bank, IDBI and Bank of Baroda, seeking to declare his and Reliance Communications' accounts as fraud accounts.