Public sector banks file appeal against stay in Anil Ambani case
Three public sector banks, Bank of Baroda, IDBI Bank, Indian Overseas Bank and auditor BDO India LLP filed an appeal before the Division Bench against the stay on proceedings initiated against industrialist Anil Ambani and Reliance Communications Ltd, classifying their bank accounts as fraud.
The banks challenged a single bench order passed in December 2025, granting interim relief to Ambani and his company, citing violations of mandatory RBI rules and a classic case of banks “waking up from deep slumber” after years.
The Division Bench of Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad heard the matter on Monday and will continue hearing arguments on January 14. Earlier, a single bench of Justice Milind Jadhav held that under the 2024 Master Directions of RBI, a forensic audit report relied upon by banks to classify an account as fraudulent must be prepared by a statutory auditor registered with the Institute of Chartered Accountants of India (ICAI).
In Anil Ambani’s case, the judge observed that the forensic report was signed by a person not registered with ICAI.
The single judge took a prima facie view that the banks could not proceed against Ambani based on such a document.
Appearing for the banks, Solicitor General Tushar Mehta argued that the suit filed by Ambani was “hopelessly time-barred” and rested entirely on an RTI application filed by a third person seeking BDO’s registration details.
“The entire purported cause of action is premised on this RTI application and the Institute’s response,” he said. Mehta argued that Anil Ambani was aware of the 2021 forensic report and had never disputed its findings on fund siphoning, fictitious debtors and misuse of bank loans.” Only ground is he (auditor) is not a member of the Chartered Accountants Institute. It is as simple and as absurd as that,” pointed out Solicitor General (SG).
SG Mehta said it effectively nullified the RBI’s Master Directions that debar persons classified as fraud from raising funds or seeking credit for five years. He warned that the stay order could open the floodgates for litigation and cast a doubt on past fraud classifications.
“This BDO is an approved forensic auditor by SEBI. It is not just a nobody picked from the street,” he added, demanding the Division Bench to stay the single-judge’s interim order under challenge, favouring Anil Ambani.
