Notice to Anil Ambani: HC tells PSU banks not to take further action

Mumbai: The Bombay High Court on Wednesday restrained public sector lenders Indian Overseas Bank, IDBI Bank and Bank of Baroda from taking further action on fraud-related show-cause notices issued to Reliance Group chairman Anil Ambani, granting interim relief to him until further instructions.

Justice Milind N. Jadhav, hearing three connected suits, observed that the notices were founded solely on a forensic audit report prepared by BDO LLP in 2020, whose competence and statutory validity Ambani has challenged.

The court, in its order, cited that the forensic audit report (FAR) dated October 15, 2020, was not in consonance with the Reserve Bank of India Master Directions as the grounds for the interim relief being granted.


"The principle of natural justice is based on the maxim 'Justice should not only be done but should manifestly be seen to be done.' It provides for a fair hearing, unbiased decision-making and the presentation of proper evidence before taking any action," said the court in its 116-page order.

The court further observed that "allowing the action (of banks) to proceed will lead to disastrous consequences in such cases, where it leads to a certain civil death without trial. Hence, on the parameter of grave and irreparable harm/loss, the plaintiff's (Ambani's) case deserves to be accepted for the grant of interim relief."

Anil Ambani had moved the court challenging the show-cause notices and fraud-classification proceedings, where he argued that the FAR prepared by defendant No. 2-BDO LLP-was not from an entity competent to conduct the external audit.