Bank fraud: Anil Ambani to not leave India; Supreme Court orders ED to set up SIT

The Supreme Court on Wednesday directed the Enforcement Directorate (ED) to constitute a Special Investigation Team (SIT) dedicated to investigating allegations of large-scale bank fraud by Reliance Communications (RCOM), its group entities and Anil Ambani [EAS Sarma v. Union of India]..A Bench of Chief Justice of India (CJI) Surya Kant and Justices Joymalya Bagchi and Vipul Pancholi passed the order."ED is well advised to constitute a SIT comprising senior officers and take all the measures so that the ongoing probe is taken to a logical conclusion," the Court said..Notably, the Court has also recorded an undertaking given by Anil Ambani's lawyers that he will not leave the country. This was after apprehensions were raised that Ambani could flee India before the probe against him is completed.The Court said that all measures should be taken to ensure that the investigation is not disrupted. "He will not leave without the permission of this court," Ambani's counsel, Senior Advocate Mukul Rohatgi assured the Court today."In the past, Mr. Rohatgi has also burnt his finders - he made a similar statement in favour of one of his clients before Delhi High Court (that he would not flee the country), and the person did flee," countered Solicitor General (SG) Tushar Mehta."But he came back and paid ₹5000 crores to this government," Rohatgi replied."Once he is out of the country, what good is a statement?' Bhushan remarked."Then there is no reason to trust anybody. Why should statement be recorded about anything," Rohatgi retorted."SG has assured that all preventive action will be taken to not hinder the probe. Mr Rohatgi assured that his client will not leave the country without leave of this court," the Court proceeded to record in its order..Among other directions, the Court today has directed the Central Bureau of Investigation (CBI) to ensure that any possible collusion by bank officials in the alleged fraud is investigated."It is imperative for CBI to probe the conduct of bank officials to check if funds were released with the collusion of bank officers. We direct that ... the CBI must look into the nexus, collusion, conspiracy, if any, and for that purpose, all lawful measures to take the investigation to its logical end (must be) adopted," the Court's order stated..The Bench further took critical note of arguments that both agencies have been slow in their investigation, and added that it expected the CBI and the ED to ensure a fair probe. "It may not be appropriate for us to express any opinion at this stage except to observe that, there has been an unexplained delay on the part of the ED ... Both agencies have taken their own time to take action ... We expect both agencies to act promptly, independently, fairly and in a dispassionate manner. Let status report be filed by ED and CBI in four weeks," the Court ordered. The Court added that going by a status report filed by the CBI, its FIR was first registered on a complaint by the SBI and that the scope of this investigation was later enlarged to cover similar complaints by other banks. The Court observed that this does not seem procedurally appropriate..During the hearing, the Court also orally remarked that it expected the CBI and the ED to periodically inform it about the progress of their investigation in the matter. "We expect that your agencies must act fairly and independently and very skillfully. We would like to have status reports every month. In four weeks, let us see, how you take the investigation to a logical conclusion. Such a huge amount has been siphoned!" the Court said, addressing Solicitor General (SG) Tushar Mehta.As the hearing progressed, the Court added, "We are hopeful that CBI and ED will do their job.".The Court was hearing a plea filed by former Secretary to the Government of India, EAS Sarma, who has sought a court-monitored investigation into Sarma has argued that the ongoing investigation in the matter by the CBI and ED is not adequate.Representing Sarma today, Advocate Prashant Bhushan argued,"FIR was registered in 2025. First arrest was affected yesterday. This is the largest corporate fraud.".Representing Anil Ambani, Senior Advocate Mukul Rohatgi opposed the claim that this case involved funds being siphoned off. He also said that he is not opposing a Special Investigation Team (SIT) probe. "I am not opposing SIT. I say it is not siphoning. If through this court and govt, a committee is formed of officers of finance etc...then there can be ways to look at it instead of prosecution," he suggested.Senior Advocate Shyam Divan, representing the Anil Dhirubhai Ambani Group of companies, also made a similar argument, denying the allegations of fund siphoning. "The impression that public fund has been siphoned off is not correct," he said. .SG Tushar Mehta disagreed with such submissions."Banks conducted a forensic audit by an outside auditor and they said it is siphoning," he said. "If there is an intention to siphon public funds, then SG is correct and it cant be said that prosecution cannot happen," CJI Kant pointed out."Even bank officials are under investigation.. and if they have colluded etc they will be probed," SG Mehta added. ."People do go bankrupt. It is not a new thing," Rohatgi countered. "The main person, the kingpin, has not been arrested so far," Bhushan maintained.He also raised concerns that insolvency proceedings were being misused to get away with loan defaults."Reliance Communications Infra had 47,000 crores of outstanding dues. In bankruptcy, it was sold off for 455 crores! 1% of the total outstanding amount and sold off to whom? To the brother’s (Mukesh Ambani) company! And the other one, Reliance Communication had 47,000 crores of outstanding dues. Just two companies have 95,000 crores of outstanding loans," he said."Resolution is pending, it is a public process! It’s not that I am buying or brother is buying – anybody can come forward and buy," Rohatgi rebutted."Unfortunately, IBC platform now is being misused like anything. You get the company, all the assets undervalued. Then you indulge in kind of an auction which is also a pre-planned (move). Friends or family come and buy," CJI Kant observed.SG Mehta assured the Court that the government is also examining these issues seriously. "Government of India is also seriously considering this issue in IBC," he said."Everyday, these matters are coming," the Court noted. "The haircut is phenomenal," SG Mehta remarked. .In the last hearing of the matter, the Court had directed the CBI and ED to file status reports on the progress of their investigation into the matter.According to the petition before the Court, RCOM and its subsidiaries - Reliance Infratel and Reliance Telecom - received loans amounting to ₹31,580 crore between 2013 and 2017 from a consortium of banks led by State Bank of India (SBI).The plea claims that a forensic audit commissioned by SBI 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.The plea goes on to assert that the FIR registered by the CBI on August 21, 2025, and the connected ED proceedings cover only a fraction of the alleged wrongdoing. The agencies are not investigating the roles of bank officials and regulators despite detailed forensic audits and independent reports pointing to widespread fraud, it states.Another central grievance raised in the petition is the nearly five-year delay by SBI in acting upon the forensic audit report it received in October 2020. The bank filed its complaint only in August 2025, which the petitioner claims gives rise to a prima facie inference of “institutional complicity.”The petition states that only judicial oversight can ensure that a matter involving such extensive public money exposure is thoroughly investigated..[Live Coverage].Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.