Supreme Court issues notice to Centre, CBI, ED, Anil Ambani on plea for probe into RCom bank fraud

The Supreme Court on Tuesday sought the responses of the Central government, Enforcement Directorate (ED), Central Bureau of Investigation (CBI) and businessman Anil Ambani to a Public Interest Litigation (PIL) petition seeking a court-monitored investigation into banking fraud involving Reliance Communications (RCOM), its group entities and Ambani [EAS Sarma Vs Union of India]..The petition was filed by EAS Sarma, former Secretary to the Government of India, alleging systemic diversion of funds, fabrication of accounts and institutional complicity.A Bench comprising Chief Justice of India (CJI) BR Gavai and Justice Vinod Chandran issued notice to the Central government, CBI, ED and Ambani and asked them to file their responses within 3 weeks..Appearing for Sarma, advocate Prashant Bhushan, contended that this could probably be the largest corporate fraud in India's history."This is regarding probably the larges corporate fraud in India's history. FIR comes to be registered only in 2025, this fraud has been going on since 2007-08," he said. "You have not served a copy (of the petition to respondents)?" the Bench asked. "We want a status report from CBI and ED," Bhushan replied.The Court then proceeded to issue formal notice to the respondents..The petition by Sarma said that the FIR registered by the Central Bureau of Investigation (CBI) on August 21, 2025 and related Enforcement Directorate (ED) proceedings cover only a small part of the alleged wrongdoing. Despite forensic audits and independent reports indicating widespread fraud, the agencies have not examined the role of bank officials and regulators, it claimed. The petitioner also cited a Bombay High Court judgment that had already noted findings of systematic diversion of funds.RCOM and its subsidiaries Reliance Infratel and Reliance Telecom allegedly received loans of ₹31,580 crore between 2013 and 2017 from a consortium of banks led by State Bank of India (SBI). A forensic audit commissioned by SBI is stated to have revealed large-scale diversion, including repayment of unrelated loans, transfers to related parties, investments immediately liquidated, and circular routing of funds to disguise evergreening. The audit also reportedly flagged transactions from bank accounts confirmed as closed thus raising concerns of fabricated financial statements..The petition alleged that shell entities such as Netizen Engineering and Kunj Bihari Developers were used to siphon and launder funds, and that sham preference-share structures were deployed to write off liabilities, allegedly causing losses of over ₹1,800 crore. It claimed these materials show a deliberate, sustained effort to mask losses and conceal diversion of public money.A key grievance was SBI’s nearly five-year delay in acting on the forensic audit submitted in October 2020.The SBI filed a complaint only in August 2025, a delay, the petitioner alleged, amounted to “institutional complicity.”As officers of nationalised banks qualify as public servants under the Prevention of Corruption Act, their conduct must be probed, it was argued..The petitioner also referred to alleged irregularities in other Anil Ambani–led companies, including Reliance Capital’s ₹16,000-crore inter-corporate deposits to subsidiaries with negative net worth and diversion of funds by home-finance subsidiaries.It was contended that the present CBI and ED probes ignore core issues such as fabrication of accounts, forged documents, non-existent bank accounts and cross-border layering. Therefore, the petitioner said there should be a Supreme Court–monitored investigation covering all forensic audit findings, insolvency-related material and possible offences under the Indian Penal Code, Prevention of Corruption Act, Prevention of Money Laundering Act, Foreign Exchange Management Act, Companies Act, RBI norms and the Insolvency and Bankruptcy Code..Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.