HC interim relief for Anil Ambani, RCom

In a major relief to industrialist Anil Ambani, the Bombay High Court on Wednesday stayed all present and future actions initiated by three public sector banks against him and Reliance Communications Ltd (RCom), to declare their loan accounts as fraud.

- Urvi Mahajani

The court held that the banks had violated mandatory provisions of the Reserve Bank of India's (RBI) Master Directions.

Justice Milind Jadhav granted interim relief after observing that the banks' action was founded on a forensic audit report that did not comply with the statutory requirements under the RBI's 2024 Master Directions on fraud classification. The audit report in question was prepared by external auditor BDO LLP.

In a detailed 116-page order, the court held that the forensic audit report could not be relied upon, as it was not authored and signed by a duly qualified chartered accountant, as required by the RBI Directions. "The RBI Master Directions are mandatory in nature and they operate within a binding statutory framework requiring banks to engage auditors strictly in accordance with applicable law," the court said.