The Delhi High Court on Wednesday directed the State Bank of India (SBI) and the Reserve Bank of India (RBI) to maintain status quo in relation to the account of Anil Ambani's Reliance Communications (RCom) and its units, Reliance Telecom and Reliance Infratel (Punit Garg vs Union Bank of India).
A single-judge Bench of Justice Prateek Jalan, however, allowed SBI to take any steps in the nature of investigation, independent of the order declaring the accounts as "fraud account".
The court added that SBI is free to issue show cause notice to Rcom, its units and the officials in order to give them a hearing, following which a reasoned order could be passed by it as per law.
The order was passed by the High Court in a petition by erstwhile director of RCom, Punit Garg.
The petition challenged the vires of the RBI circular on the classification of accounts as fraud.
Senior Advocate JJ Bhatt, for RCom, argued that the circular violates the principles of natural justice as it does not afford an opportunity to be heard to the parties.
Telangana High Court had read down the circular to include the principles of natural justice, he submitted.
In response to the petition, counsel for SBI, Advocate Akshit Kapur stated that the RCom accounts have already been declared as fraud accounts.
The Court issued notice in the petition and sought the response of RBI and SBI.
Keeping in view the status quo orders passed in other similar matters, the Court directed that the same be maintained in this case.
The matter would be heard next on January 13 along with other petitions assailing the RBI Circular.