Anil Ambani has approached the Supreme Court challenging the Bombay High Court’s order that upheld SBI’s decision to label RCom and its promoter as “fraud.” The appeal questions SBI’s process and Ambani’s liability as a “person in control” of the company.
Industrialist Anil Ambani has now approached the Supreme Court after the Bombay High Court upheld the State Bank of India’s (SBI) decision to mark the loan accounts of Reliance Communications Limited (RCOM) and its promoter as “fraud.”
The appeal, sources close to the matter told Bar & Bench, was filed last week and is still waiting to be listed for hearing.
The case goes back to a series of loans that SBI had given to RCOM and its group companies between 2012 and 2016. During this period, SBI sanctioned more than Rs 3,600 crore in loans to RCom, Reliance Telecom and Reliance Infratel.
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After the companies defaulted, RCOM’s account slipped into the non-performing asset (NPA) category in August 2016. A forensic audit carried out by BDO India for the period 2013 to 2017 pointed out several irregularities in how the funds were used.
Following this audit, SBI’s Fraud Identification Committee decided in November 2020 to classify the loan account as fraud.
However, the Bank later withdrew this classification after the Supreme Court’s 2023 judgment in State Bank of India v. Rajesh Agarwal, which made it clear that banks must first give borrowers a notice and a chance to respond before such a declaration is made.
After this ruling, SBI issued a fresh show-cause notice to RCOM and its directors, including Anil Ambani, on December 20, 2023.
In June 2025, after reviewing the responses, SBI once again categorised the loan accounts of RCOM and Anil Ambani as fraudulent.
The Bank said this was done due to diversion of funds, breach of loan conditions and suspicious related-party transactions. SBI also informed the Reserve Bank of India (RBI) and began the process of approaching the Central Bureau of Investigation (CBI).
Anil Ambani challenged the decision before the Bombay High Court. He argued that he was only a non-executive director and had no involvement in day-to-day operations, and therefore should not have been singled out.
He also claimed that he was not given a fair and complete opportunity to defend himself.
However, on October 3, a Division Bench of Justices Revati Mohite Dere and Neela Gokhale rejected his arguments and held that Ambani, being the “promoter” and “person in control” of RCOM, would have to face the consequences of SBI’s fraud classification.
ALSO READ: Bombay High Court Dismisses Anil Ambani’s Plea Against SBI’s ‘Fraud’ Loan Classification
The High Court stated that SBI had properly followed the RBI’s July 2024 master directions on how banks must classify fraud accounts. Interestingly, the same Bench had earlier stayed a similar fraud declaration issued by Canara Bank against Ambani.
That earlier stay was granted because the Bank had not followed the RBI’s requirement that borrowers must be given a hearing. Later, in July 2025, the case was closed after Canara Bank informed the Court that it had withdrawn the fraud tag.
Ambani had also challenged a fraud classification by Union Bank of India, but the Bench in that case refused to grant a stay and asked him to approach RBI instead.
In its latest judgment upholding SBI’s action, the Bombay High Court made an important observation about the responsibility of promoters and directors when a company’s loan account is labelled fraudulent.
The Court said,
“When a company’s loan account is classified as fraud by the bank, the promoters/ directors who were in control of the company will have to face penal consequences.”
It further noted,
“It is well settled that once the company’s account is classified or declared to be a fraud account, the promoters/directors who were in control of the company are liable to penal measures and to be reported as fraud and debarred from raising funds or seeking credit facilities, as they were in control of the company and responsible for the acts/omissions of the company.”
With the High Court ruling against him, Anil Ambani has now turned to the Supreme Court seeking relief.
His appeal challenges the findings that he was the person in control of the company and that SBI had acted correctly in marking him under the fraud category. The Supreme Court is expected to take up the matter once the appeal is formally listed.
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