2 months ago
1
The RBI's Master Directions purpose to place frauds and unscrupulous borrowers for timely action, and each usurpation of the aforesaid is not taxable to judicial scrutiny, the Bombay High Court has said portion lifting the enactment connected enactment by 3 banks to classify industrialist Anil Ambani's accounts arsenic fraud.
A Bench of Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad connected Monday (February 23, 2026) quashed a azygous Bench bid of December 2025, which stayed the enactment initiated by 3 public assemblage banks based connected the Master Directions issued by the RBI to classify Mr. Ambani's and Reliance Communications Ltd.'s slope accounts arsenic fraud.
The Court allowed appeals filed by the 3 nationalist assemblage banks and the auditor steadfast BDO India LLP against the December 2025 interim bid passed by a azygous Bench of the HC. The Division Bench held the azygous Bench bid arsenic "perverse and illegal" and successful breach of earthy justness and said it suffers from "procedural irregularity and impropriety".
The Court successful its judgment, which was made disposable connected Tuesday (February 24, 2026), said the Master Directions issued by the Reserve Bank of India (RBI) cannot beryllium interpreted successful a antithetic mode truthful arsenic to origin prejudice to the lender banks and harm their interest.
Also read: ED issues caller summons to Anil Ambani for February 26
It added that the contented was of nationalist value and acrophobic the fiscal strategy successful the state and hence assistance of an interim enactment successful specified a substance was "patently illegal". Based connected the facts of the case, it is not hard to get astatine a decision that "no irreparable injury" would beryllium caused to Mr. Ambani if the proceedings against him are continued, the judgement noted.
"There is nary prima facie crushed to assistance an interim injunction successful favour of the responsive [Mr. Ambani]. There are transgression investigations going connected which shall beryllium straight affected by the bid of injunction granted by the court," HC said.
The Court besides criticised the azygous Bench bid for its "contradictory findings" and said that it was based connected "flawed assumptions of information and law". The azygous Bench wholly misunderstood the superior entity down the Master Directions issued by the RBI, the judgement said, adding the aforesaid were issued successful the involvement of Banking Policy.
"These Master Directions are intended astatine securing nationalist wealth and to supply a model for aboriginal detection of frauds and betterment of nationalist wealth done timely identification, control, reporting and mitigation of fraud risk," HC said.
Also read: ED issues caller summonses to Anil Ambani and his wife
These directions supply guidelines to the banks and fiscal institutions for effectual probe and reporting of fraud cases to due regulatory and instrumentality enforcement authorities, it added.
Through these directions, the RBI disseminates accusation to the banks connected details of frauds and unscrupulous borrowers truthful that timely enactment tin beryllium taken and the banks' interests are protected, the Court noted.
"These directions cannot beryllium interpreted successful a antithetic mode truthful arsenic to origin prejudice to the lender banks and harm their interest. Every usurpation of the Master Directions shall not beryllium amenable to judicial scrutiny," it said.
The Bench besides noted that the banks were entitled to prosecute an outer auditor, including a forensic adept oregon an interior squad for probe and said the forensic study of BDO LLP was prepared by outer auditors who are besides forensic experts.
The Master Directions of 2016 bash not contemplate a mandatory forensic study earlier the banks instrumentality a last decision, HC said. The Court besides noted that the azygous judge's uncovering that the study submitted by BDO LLP does not prima facie look to beryllium a forensic study is intelligibly "perverse and liable to beryllium acceptable aside".
BDO LLP is an accounting consultancy firm, which is empanelled by the Indian Banks Association and besides the SEBI for conducting a forensic audit, the judgement said. The Court agreed with the arguments of the banks that the azygous judge's bid undermines nationalist assurance successful the banking system.
On Monday (February 23, 2026), Mr. Ambani's counsels sought the HC to enactment its bid truthful that they could attack the Supreme Court, but the petition was declined.
The earlier azygous Bench bid had stayed each contiguous and aboriginal enactment by Indian Overseas Bank, IDBI Bank and Bank of Baroda, noting that the enactment was based connected a legally flawed forensic audit and violated the RBI's mandatory guidelines.
The 3 banks successful their entreaty said the forensic audit, which led to accounts being classified arsenic "fraud", was legally valid and based connected superior findings of money siphoning and misutilisation.
Mr. Ambani had challenged earlier the azygous Bench show-cause notices issued by the 3 banks, seeking to state his and Reliance Communications' accounts arsenic fraud accounts.
As an interim relief, helium sought a enactment of the notices and an injunction against immoderate coercive enactment connected the crushed that BDO LLP was not qualified to behaviour the forensic audit arsenic its signatory was not a chartered accountant.
BDO LLP was an accounting advisor steadfast and not an audit firm, Mr. Ambani claimed. The azygous seat had agreed with Mr. Ambani and stayed the enactment by the banks.
