The Bombay High Court has dismissed Anil Ambani’s petition against State Bank of India’s (SBI) move to classify his company’s loan account as fraud and report him to the Reserve Bank of India (RBI). On 13 June 2025, the SBI declared the Reliance Communications account as “fraud” and reported Ambani’s name to the RBI, as he was the chairman, promoter, non-executive and non-independent director at the time.
In its final decision, the court found no merit in the petition and upheld SBI’s decision, as Ambani was active and in control of the company at the time its account was declared “fraud”.
Between 2012 and 2016, the SBI had granted loans of INR15 billion (USD169 million) and INR5.65 billion, along with a non-fund-based credit facility worth INR8.5 billion to the company. The SBI had also granted loans of INR1.25 billion to Reliance Telecom and INR6.35 billion to Reliance Infratel, both were Ambani’s companies.
In 2017, since Reliance Communications had defaulted its payment to the SBI, the RBI declared the company loan account a “non-performing asset”, which, as per the banking regulator, was a loan account that had not made any repayments in more than 90 days.
On 20 December 2023, the SBI issued a show cause notice to the company, Ambani, and four other individuals about the loan account and its acts or omissions. Ambani replied to this notice on 3 January 2024, saying that the notice did not have complete details of the basis of its intent to declare the account as “fraud” and that, since the company was under the corporate insolvency resolution process, he did not have access to the required documents to respond to the notice, requesting the SBI to furnish documentation on which the notice was based.
On 5 March 2024, the SBI responded to Ambani’s requests, sharing the investigation report sans the annexures and sought his definitive reply. Ambani then replied on 19 March 2025 through his lawyer that the SBI had furnished an incomplete and redacted investigation report, requesting that the full and complete report be shared and asked for additional time to respond.
On 15 July 2024, the RBI notified new directions (2024 directions), which superseded the existing directions (2016 directions) under which the original show cause notice was passed.
Ambani then sent the SBI a letter on 21 October 2024, stating that, since the 2024 directions have been notified, the original show cause notice ceased to exist and should be withdrawn. The SBI denied receiving this letter.
Then, on 13 June 2025, the SBI released an order whereby the company’s account was classified as “fraud” and Ambani, being the chairman, promoter and non-executive director of the company, was reported to the RBI.
On 2 July 2025, Ambani replied to this order, objecting to the actions undertaken, adding that the order was made ex parte, thus not giving an opportunity to Ambani to present his arguments and objections in person to the bank (personal hearing), and that it was in violation of judgments of the Supreme Court and the Bombay High Court.
Ambani also said the order should be withdrawn as the original notice was passed under the 2016 directions, and thus superseded by the 2024 directions. Ambani also claimed that he was a non-executive director and was not responsible for the day-to-day functioning of the company, and similar allegations made against the other individuals had been dropped as they too were non-executive directors. Ambani had also requested the SBI, in his reply, to refrain from acting on the order.
Ambani then filed his petition against the order before the Bombay High Court on 7 July 2025.
The judgment in State Bank of India & Ors v Rajesh Agarwal & Ors (2023) was a major point of discussion in the case, as it formed the basis of the 2024 directions. The main question was whether the right of being heard includes a right of personal hearing. In the decision, the court said it did not and that the right to be heard only included the right of representation.
The court also said there was no requirement for the show cause notice to contain the specific allegations against the company, or its director or promoter.
Regarding Ambani’s claim that he was not the person “in control” of the company, the court said the annual reports of the company from the time period in consideration referred to him as the “promoter” and the “person having control”. For the other individuals named in the show cause notice but later exonerated, the court said they were non-executive directors and were not responsible for the day-to-day functioning of the company.
Finally, the court found that SBI’s order on 13 June 2025 was a reasoned order without any infirmity, and thus Ambani’s request was dismissed.
