A Division Bench of the Bombay High Court set aside a single judge’s interim order restraining banks and BDO India LLP from acting against Anil Ambani under RBI’s 2024 fraud classification Master Directions, terming the earlier decision perverse and declining stay relief.
MUMBAI: A Division Bench of the Bombay High Court has set aside a single judge’s interim order that had prohibited three banks and the auditor BDO India LLP from acting against Anil Ambani under the Reserve Bank of India’s 2024 Master Directions concerning fraud classification
Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad referred to the single judge’s decision as “perverse.”
Ambani’s attorney requested a stay of today’s ruling for a period of four weeks, arguing that this reversal would negatively impact other ongoing cases reliant on the report.
However, the Division Bench denied the stay request, stating that it would mean perpetuating an unlawful order.
The Division Bench stated,
“As we have already held that the order challenged is illegal and suffers from decisional irregularity and illegality, to sustain the operation of this order shall amount to continuing the illegal order for the next 4 weeks and perpetuating the illegality. Thus, the request for stay on the operation of this judgment is declined,”
This ruling came in response to an appeal from the Bank of Baroda, IDBI Bank, Indian Overseas Bank, and BDO India LLP, which opposed an order made by Justice Milind Jadhav in December 2025.
The earlier single judge’s ruling had barred the banks from initiating any coercive measures against Anil Ambani based on a forensic audit report related to Reliance Communications and its associated entities.
Justice Jadhav determined that according to the 2024 Master Directions, a forensic report used for fraud classification must be authored by a statutory auditor registered with the Institute of Chartered Accountants of India (ICAI), observing that the report concerning Ambani was signed by someone not registered with ICAI.
Based on this preliminary finding, the single judge had halted all coercive actions taken by the three banks founded on the October 2020 forensic audit report.
In their appeal to the Division Bench, the banks contended that Ambani’s suit was “hopelessly time-barred” and was based solely on an RTI application from a third party that sought BDO’s registration information.
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They further asserted that Ambani had not contested the 2021 forensic report’s claims of alleged fund misappropriation, fictitious debtors, and abuse of bank loans, but rather challenged it solely on the basis of the signatory’s ICAI membership status.
The banks argued that the single judge’s ruling effectively nullified the RBI’s Master Directions, which prohibit individuals classified as fraud from obtaining funding or credit for five years.
They also expressed concerns that such judicial relief could create a precedent and cast doubt on previous fraud classifications.
Meanwhile, the audit firm pointed out its status as a SEBI-approved forensic auditor.
Case Title: Bank of Baroda v. Anil Ambani & Ors. and connected petitions.
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