There is a big news related to Anil Ambani and his son – Jai Anmol Ambani. The Delhi High Court has set aside Union Bank of India’s decision to classify the bank account of a company owned by Jai Anmol Ambani, son of industrialist Anil Ambani, as fraudulent.
Recently, the Union Bank of India had classified the account as ‘fraud’. The matter reached the Delhi High Court and now Justice Jyoti Singh has passed the order on Friday after hearing a plea filed by Jai Anmol Ambani. He argued that the bank had declared the account as fraud without issuing any show cause notice or giving him a chance to be heard, which violated the principles of natural justice.
Ambani relied on a Supreme Court ruling in SBI vs Rajesh Agarwal, which clearly states that banks must give borrowers prior notice and an opportunity to respond before tagging an account as fraud.
During the hearing, Senior Advocate Rajiv Nayar, appearing for Ambani, pointed out that Union Bank’s own affidavit showed that the show cause notice was sent to an old address that the company had vacated in September 2020. This meant that the notice was never actually received.
The High Court agreed with this argument and observed that no valid show cause notice was served before declaring the account as fraud. Based on this, the Court quashed Union Bank’s fraud classification order.
However, the Court clarified that the ruling does not stop the bank from taking fresh action. It allowed Union Bank to issue a new show cause notice, provided the bank shares all relevant documents and material with Ambani and gives him a proper opportunity to respond before passing a fresh order.
The case has wider implications as the CBI has filed cases against Anil Ambani group companies, alleging fraud of nearly ₹14,853 crore. In Jai Anmol Ambani’s case, the CBI has alleged that he caused a loss of about ₹228 crore to Union Bank of India.
According to reports, Jai Anmol Ambani was a director at Reliance Home Finance Ltd (RHFL), which borrowed large sums but failed to repay them. A forensic audit allegedly found that the loan money was diverted and misused, leading to the account becoming a non-performing asset (NPA).
Union Bank later claimed a loss of around ₹228.06 crore and filed a complaint with the CBI alleging cheating, criminal conspiracy, and misconduct.
According to the complaint, Reliance Home Finance had taken credit limits of nearly ₹450 crore from Union Bank’s SCF branch in Mumbai for business purposes. The bank had set clear conditions for the loan, including timely repayment, regular payment of interest, proper submission of security details, and routing all sales income through the bank account.
However, the company failed to repay its loan instalments on time. Due to this, the account was declared a non-performing asset (NPA) on September 30, 2019.
A forensic audit of the company’s accounts was later conducted by Grant Thornton for the period from April 2016 to June 2019. The audit reportedly found that the loan money was wrongly used and diverted for purposes other than what it was approved for.
The bank has alleged that the former promoters and directors of the company misused the funds by manipulating accounts, committing criminal breach of trust, and diverting the money for personal or unauthorised use.
