In a significant setback to industrialist Anil Ambani, the Bombay High Court on Monday quashed a single bench interim order that had stayed proceedings initiated by public sector banks to classify his and Reliance Communications’ bank accounts as “fraud”.
A division bench comprising Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad allowed appeals filed by three public sector banks and audit firm BDO India LLP against the December 2025 interim order. The division bench termed the earlier order “illegal and perverse” while setting it aside.
Counsel for Ambani sought a stay on the division bench’s ruling to enable an appeal before the Supreme Court. However, the High Court declined the request.
The banks had challenged the December 2025 single bench order, which granted interim relief to Ambani and his company, citing alleged violations of mandatory guidelines issued by the Reserve Bank of India. The single bench had also observed that the banks appeared to have “woken up from deep slumber” after several years.
The interim order had restrained Indian Overseas Bank, IDBI Bank and Bank of Baroda from taking present or future action against Ambani and Reliance Communications, holding that the move was based on a legally flawed forensic audit and in violation of RBI norms.
In their appeals, the banks contended that the forensic audit conducted by BDO India LLP was legally valid and revealed serious findings of fund diversion and misutilisation, forming the basis for classifying the accounts as fraud.
Ambani had challenged show-cause notices issued by the banks before the single bench, arguing that BDO LLP was not qualified to conduct a forensic audit as the signatory was not a chartered accountant. He had also claimed that BDO LLP functioned as an accounting consultant rather than a statutory audit firm.
The single bench had accepted these arguments and stayed the banks’ action. With the division bench now overturning that order, proceedings to classify the accounts as fraud are expected to move forward.
