The Supreme Court on Thursday declined to interfere in proceedings linked to the fraud classification of industrialist Anil Ambani, dismissing his appeals against a Bombay High Court division bench order that favoured lender banks.
The ruling allows banks to continue action arising from fraud-related show-cause notices issued to Ambani. It also leaves in place the high court’s finding that interim relief granted earlier against such action should not have been allowed.
Ambani had challenged the division bench order, which had set aside interim protection earlier granted to him in matters involving Bank of Baroda, IDBI Bank and Indian Overseas Bank.
The high court had held that lenders were entitled to rely on a forensic audit conducted under the Reserve Bank of India fraud risk management framework. It had also said courts should be slow to halt such proceedings at an interim stage.
The case arises from a forensic audit by BDO India LLP into the affairs of Reliance Communications and related entities. The report formed the basis for banks issuing show-cause notices and, in some instances, classifying accounts as fraud.
During the hearing, counsel for Ambani told the Supreme Court that he was willing to work out repayments and remained open to settlement talks with lenders. The submission was made to show his intent to resolve outstanding issues even as the legal dispute continues.
While refusing relief, the Supreme Court said observations made by the Bombay High Court division bench would not affect the trial of pending civil suits filed by Ambani against the banks and other parties.
The court also granted him liberty to pursue any other remedies available under law.
With the apex court declining to step in, banks can proceed under RBI guidelines, while Ambani’s remaining challenges will continue in pending civil suits and other legal forums.
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