The Delhi High Court on Tuesday directed the Union Bank of India to explain whether it had issued a show cause notice to industrialist Anil Ambani’s son Jai Anmol Ambani before declaring his company’s account as fraudulent [Anmol Ambani v Union Bank of India].
Justice Jyoti Singh ordered the bank’s counsel to file a short affidavit on the issue.
“I am not saying give them a clean chit, but they must be given a show cause notice,” the Court remarked.
It said it will consider the case again on December 19.
Ambani has approached the High Court challenging the Union Bank of India’s decision to declare the account as fraud. It is his case that the bank took the decision without issuing any show cause notice or hearing him, violating natural justice.
It has also been stated that the move went against the Supreme Court’s decision in State Bank of India v Rajesh Agarwal in which it was held that borrowers must be given prior notice and an opportunity to respond before declaring the account as fraud.
Notably, the CBI has filed cases against Anil Ambani group companies on allegations of fraud amounting to nearly ₹14,853 crores.
The agency’s case against Jai Anmol Ambani is that he cheated the Union Bank of India and caused the public sector bank a loss of nearly ₹228 crore.
According to reports, the CBI has said that Reliance Home Finance Ltd (RHFL), where Jai Anmol Ambani was a director, borrowed substantial funds but failed to meet repayment obligations. A forensic audit allegedly found that loan proceeds were diverted and misused rather than used for their sanctioned purposes, resulting in the account slipping into non-performing asset (NPA) status.
Union Bank claimed a wrongful loss of approximately ₹228.06 crore and after classifying the account as fraudulent, lodged a complaint with the CBI alleging criminal conspiracy, cheating and misconduct.
Senior Advocate Rajiv Nayar argued Anmol Ambani's case.
The petition was filed through advocate Rishi Agrawala and Tejasvi Chaudhry of Agarwal Law Associates.