In a major legal development, the Bombay High Court has lifted an earlier interim stay that had shielded businessman Anil Ambani and his company from being classified under a fraud category by banks. The court observed that continuing such protection could weaken public confidence in the banking system.
The case relates to a forensic audit conducted in connection with financial transactions involving Reliance Communications Limited and associated entities. In 2020, the audit reportedly flagged potential diversion of funds amounting to over ₹31,580 crore. Based on these findings, a consortium of banks initiated proceedings to classify certain accounts as fraudulent.
Earlier, a single judge bench had granted temporary relief, preventing banks from moving ahead with fraud classification. The argument presented by Ambani’s legal team was that the forensic audit was not valid because the expert conducting it was allegedly not a qualified chartered accountant under the Reserve Bank of India guidelines.
However, after hearing appeals from the concerned banks and an external auditing firm, the division bench found the interim stay legally flawed and set it aside. The court clarified that RBI regulations allow forensic audits to be conducted by external experts and not strictly by chartered accountants.
With the stay removed, banks are now free to continue the fraud classification process if further evidence supports their case. The ruling is being seen as significant because it reinforces the authority of financial institutions to take action in suspected fraud matters.
Legal experts say the judgement highlights the importance of balancing procedural fairness with accountability. For Anil Ambani, the order marks another setback in an ongoing legal battle linked to financial liabilities and regulatory scrutiny.
The case will now proceed further, and its outcome may have broader implications for corporate governance standards and trust in India’s banking system.
