Bombay High Court Grants Interim Relief To Anil Ambani, Orders Stay on Action by Bank of Baroda

Recently, Bank of Baroda, one of India’s leading public sector banks, had declared the loan accounts of Reliance Communications Ltd. (RCom) and its erstwhile Director, Anil Ambani, as ‘fraud’. Not only Bank of Baroda, but SBI and Bank of India have also declared the account as Fraud.

Anil Ambani filed a petition in the Bombay High Court and now the court has provided temporary relief to Anil Ambani.

Ambani approached the High Court challenging Bank of Baroda’s order classifying the company’s loan accounts as fraudulent, citing allegations of diversion of funds, misuse of loan proceeds, unauthorised transactions, and improper use of inter-corporate deposits.

Senior advocate Navroz Seervai, appearing for Ambani, argued that the forensic audit report relied upon by the Bank was commissioned by State Bank of India (SBI) as the lead bank of a consortium that extended loans to Reliance Communications. He submitted that Bank of Baroda was not part of this consortium, and therefore, its independent action was without authority and illegal.

What Bank of Baroda said?

Counsel for the Bank of Baroda countered that the Bank had already communicated its decision to the Reserve Bank of India (RBI) in compliance with the Master Circular of Fraud Classification. It further submitted that SBI had already reported the matter to the Central Bureau of Investigation (CBI) after categorising the account as fraudulent.

“The petitioner apprehends action on our part, but SBI has already approached the CBI, and the agency has written to my client (Bank of Baroda) seeking details. Providing such information to the CBI cannot be restrained,” the Bank contended.

Court’s Observation

While acknowledging the Bank’s position, the Bench held that the Bank should be given an opportunity to respond formally through an affidavit. However, it directed that no action be taken in furtherance of the September 4 order until the next date of hearing.

The Bombay High Court on Wednesday restrained Bank of Baroda from taking coercive steps against Reliance Communications. A Division Bench of Justice Riyaz Chagla and Justice Farhan Dubash directed that no action be taken until the next hearing scheduled for September 24.

“As the Bank has sought time to file an affidavit in reply to the present petition, the counsel for the Bank, on instructions, states that it will not act in furtherance of the impugned notice till September 24. The Bank shall file its reply by September 23, and until then, there shall be no coercive action.”

The matter will now be heard on September 24, 2025.