Bombay High Court Overturns Interim Relief to Anil Ambani in Fraud Classification Case

Division Bench Sets Aside Single Judge Order, Allows Banks’ Appeals​

Mumbai, February 23: In a significant development, the Bombay High Court on Monday overturned a single-judge interim order that had stayed proceedings against industrialist Anil Ambani and Reliance Communications Ltd in connection with the classification of their bank accounts as fraudulent.

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 bench described the earlier order as illegal and perverse, effectively clearing the way for the banks to proceed with their actions.

Ambani’s legal team requested a stay on the division bench’s ruling to enable them to approach the Supreme Court, but the court declined the request.

Background of the Dispute​

The controversy stems from show-cause notices issued by Indian Overseas Bank, IDBI Bank and Bank of Baroda, seeking to declare the accounts of Anil Ambani and Reliance Communications as fraudulent.

The single bench of the High Court had granted interim relief in December 2025, staying all present and future actions by the three banks. The order had observed that the action appeared to violate mandatory guidelines issued by the Reserve Bank of India and had questioned the legality of the forensic audit.

The judge had also remarked that the banks seemed to have awakened after years, implying delays in initiating action.

Forensic Audit at the Centre of Legal Battle​

The banks had relied on a forensic audit report submitted by BDO LLP, which, according to them, contained serious findings related to fund siphoning and misutilisation. Based on this report, the accounts were classified as fraud.

In their appeal before the division bench, the banks contended that the forensic audit was legally valid and properly conducted. They argued that Ambani had raised only a technical objection to the audit process before the single bench.

Ambani had challenged the show-cause notices on the ground that BDO LLP was not qualified to conduct the forensic audit. He claimed that the signatory to the report was not a chartered accountant and that BDO functioned as an accounting consultant firm rather than an audit firm.

The single bench had accepted this argument and stayed the banks’ actions. However, the division bench has now reversed that interim relief, allowing the proceedings against Ambani and Reliance Communications to continue.

With the High Court declining to stay its own order, the next legal step may lie before the Supreme Court.