Bombay High Court dismisses Anil Ambani plea against SBI move to classify his loan account as fraud

The Bombay High Court on Friday dismissed the plea filed by industrialist Anil Ambani against State Bank of India’s (SBI) decision declaring his loan accounts as “fraud.” [Anil D Ambani v. State Bank of India]

A Division Bench of Justices Revati Mohite Dere and Neela Gokhale rejected Ambani’s arguments of procedural unfairness and upheld SBI’s action.

A copy of the judgment is awaited.

In June 2025, SBI tagged the loan accounts of Reliance Communications (RCom) and its promoter Anil Ambani as fraudulent, citing diversion of funds, breach of covenants and related-party transactions. The Bank subsequently informed the Reserve Bank of India (RBI) and initiated steps to approach the Central Bureau of Investigation.

Ambani challenged the decision, contending that he was only a non-executive director and had been selectively singled out. He also argued that adequate opportunity to present his defence was not provided.

The High Court, however, found that SBI had followed the RBI's July 2024 Master Directions on fraud classification and dismissed the plea.

Notably, the same bench had earlier stayed a similar order issued by Canara Bank against Ambani, citing non-compliance with the RBI’s Master Circular. This Circular requires banks to hear the borrower before classifying their account as fraudulent. However, in July 2025, the matter came to be disposed after Canara Bank informed the Court that it had withdrawn the fraud classification.

Ambani had also moved against Union Bank of India's fraud classification. However, the same Bench declined a stay and directed Ambani to approach RBI.

Anil Ambani was represented by Senior Advocates Darius Khambata and Prateek Seksaria

SBI was represented by Senior Advocate Aspi Chinoy with a team from Saraf & Partners comprising Founder and Managing Partner, Mohit Saraf and Partners, Sudeshna Guha Roy and Abhiraj Arora.