The Bombay High Court on Friday dismissed a plea by businessman Anil Ambani challenging the State Bank of India’s classification of his loan account and that of Reliance Communications (RCom) as “fraud,” according to Live Law.
A division bench of Justices Revati Mohite-Dere and Dr Neela Gokhale pronounced the order.
The classification had been made on June 13, 2025, in accordance with the Reserve Bank of India’s Master Directions on Fraud Risk Management and SBI’s internal policy. Ambani had approached the court contending that the bank did not follow principles of natural justice, as he was not given an opportunity to be heard before his account was tagged as fraud.
He also noted that certain material relied upon for the classification was not initially shared with him and was only provided after a six-month delay.
SBI’s classification of RCom and its promoter comes amid a significant credit exposure. The bank’s fund-based principal outstanding to RCom stands at Rs 2,227.64 crore, along with accrued interest and expenses from August 26, 2016, in addition to a non-fund-based bank guarantee of Rs 786.52 crore.
RCom is currently undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016, with a resolution plan approved by the Committee of Creditors and filed with the National Company Law Tribunal (NCLT), Mumbai, on March 6, 2020, awaiting NCLT approval.
This is not the first time SBI has classified the account as fraud. The bank had previously done so in November 2020 and lodged a complaint with the CBI in January 2021, which was returned following a Delhi High Court ‘status quo’ order dated January 6, 2021.
After the Supreme Court’s judgment in SBI vs Rajesh Agarwal on March 27, 2023, which required lenders to provide borrowers an opportunity to represent themselves, the classification was reversed in September 2023. Following a re-run of the process under the RBI circular dated July 15, 2024, the account was reclassified as fraud in June 2025.
In addition to the RCom case, the personal insolvency resolution process against Anil Ambani is also ongoing before the NCLT, Mumbai.
SBI has also lodged a complaint with the CBI in line with the fraud classification.
A division bench of Justices Revati Mohite-Dere and Dr Neela Gokhale pronounced the order.
The classification had been made on June 13, 2025, in accordance with the Reserve Bank of India’s Master Directions on Fraud Risk Management and SBI’s internal policy. Ambani had approached the court contending that the bank did not follow principles of natural justice, as he was not given an opportunity to be heard before his account was tagged as fraud.
He also noted that certain material relied upon for the classification was not initially shared with him and was only provided after a six-month delay.
SBI’s classification of RCom and its promoter comes amid a significant credit exposure. The bank’s fund-based principal outstanding to RCom stands at Rs 2,227.64 crore, along with accrued interest and expenses from August 26, 2016, in addition to a non-fund-based bank guarantee of Rs 786.52 crore.
RCom is currently undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016, with a resolution plan approved by the Committee of Creditors and filed with the National Company Law Tribunal (NCLT), Mumbai, on March 6, 2020, awaiting NCLT approval.
This is not the first time SBI has classified the account as fraud. The bank had previously done so in November 2020 and lodged a complaint with the CBI in January 2021, which was returned following a Delhi High Court ‘status quo’ order dated January 6, 2021.
After the Supreme Court’s judgment in SBI vs Rajesh Agarwal on March 27, 2023, which required lenders to provide borrowers an opportunity to represent themselves, the classification was reversed in September 2023. Following a re-run of the process under the RBI circular dated July 15, 2024, the account was reclassified as fraud in June 2025.
In addition to the RCom case, the personal insolvency resolution process against Anil Ambani is also ongoing before the NCLT, Mumbai.
SBI has also lodged a complaint with the CBI in line with the fraud classification.
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