MUMBAI: The Bombay High Court on Friday dismissed a petition filed by industrialist Anil Ambani challenging the State Bank of India’s decision to classify his and Reliance Communications’ (RCom) loan account as “fraud.”
The division bench comprising Justices Revati Mohite-Dere and Dr Neela Gokhale delivered the verdict, upholding the bank’s classification made on June 13, 2025, under the Reserve Bank of India’s Master Directions on Fraud Risk Management and SBI’s internal fraud detection policy.
Anil Ambani had argued that the bank violated the principles of natural justice by not giving him a fair hearing before tagging the account as fraudulent. He further contended that key materials used for the classification were not initially disclosed to him and were only shared after a delay of six months.
SBI’s move comes amid a significant credit exposure to RCom – with Rs2,227.64 crore in fund-based principal outstanding, plus interest and related expenses since August 2016, and an additional Rs786.52 crore in non-fund-based bank guarantees.
RCom is currently undergoing the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. A resolution plan has been approved by the Committee of Creditors and was filed with the National Company Law Tribunal (NCLT), Mumbai, in March 2020. The plan remains pending for approval.
Status quo
This is not the first time the account has been flagged. SBI had previously marked it as fraud in November 2020 and filed a complaint with the Central Bureau of Investigation (CBI) in January 2021. However, the classification was stayed by a ‘status quo’ order issued by the Delhi High Court on January 6, 2021.
Following the Supreme Court’s landmark judgment in SBI vs Rajesh Agarwal in March 2023 – which mandated lenders to provide borrowers an opportunity to respond before such classification – the earlier fraud tag was withdrawn in September 2023.
After a fresh process initiated under the RBI’s updated circular dated July 15, 2024, SBI once again designated the account as fraudulent in June 2025.
In parallel, a personal insolvency resolution process against Anil Ambani continues before the NCLT in Mumbai. SBI has also filed a fresh complaint with the CBI, in line with the latest classification.
