The Bombay Excessive Courtroom, whereas lifting a keep on proceedings by three banks for classifying businessman Anil Ambani’s accounts as fraudulent, stated any violation of the Act will not be topic to judicial inquiry because it goals to determine fraudulent and unscrupulous debtors in a well timed method and take well timed motion.
A bench of Chief Justice Shree Chandrashekhar and Justice Gautam Ankad on Monday (February 23, 2026) put aside a single bench order of December 2025 staying proceedings initiated by three public sector banks on the premise of a grasp course issued by the RBI to categorise financial institution accounts of Mr. Ambani and Reliance Communications as fraudulent.
The court docket allowed an enchantment filed by three public sector banks and audit agency BDO India LLP in opposition to the December 2025 interim order handed by the only HC bench. The division bench stated the only court docket order was “perverse and unlawful” and in violation of pure justice and was riddled with “procedural irregularities and injustices”.
The court docket, in a judgment launched on Tuesday (February 24, 2026), stated the Grasp Instructions issued by the Reserve Financial institution of India (RBI) can’t be interpreted in any other case to the detriment of lender banks and to the detriment of their pursuits.
It added that the matter is of public significance and considerations the nation’s monetary system, so granting a moratorium on such issues is “clearly unlawful”. Based mostly on the details of the case, it’s not tough to achieve the conclusion that “no irreparable damage would consequence” to Ambani if the case in opposition to him have been continued, the judgment stated.
“There isn’t a prima facie cause to grant interim injunction in favor of the accused (Mr. Ambani). There may be an ongoing prison investigation which shall be immediately affected by the injunction granted by the court docket,” the HC stated.
The court docket additionally criticized the court docket’s single order as a “contradictory discovering” and stated it was primarily based on “false assumptions about truth and legislation.” The judgment stated the only court docket had utterly misunderstood the principle objective behind the Grasp Instructions issued by the RBI, including that the identical was issued within the curiosity of banking coverage.
“These Grasp Instructions are supposed to safe public funds and supply a framework for restoration of public funds via early detection of fraud and well timed identification, administration, reporting and mitigation of fraud dangers,” the HC stated.
These directions present banks and monetary establishments with pointers to successfully examine fraud instances and report them to acceptable regulatory and legislation enforcement authorities, it added.
The court docket famous that via these instructions, RBI will disseminate data to banks about particulars of fraud and unscrupulous debtors in order that well timed motion could be taken and the pursuits of banks are protected.
“These directions should not be interpreted in any other case to the detriment of lender banks and to the detriment of their pursuits. Any breach of the fundamental directions shouldn’t be topic to judicial scrutiny.”
The court docket additionally famous that the financial institution had the precise to interact exterior auditors, together with forensic specialists and an inner investigation group, within the investigation, and stated BDO LLP’s forensic report was ready by an exterior auditor who was additionally a forensic knowledgeable.
The HC stated the 2016 Grasp Instructions didn’t ponder making forensic stories obligatory for banks earlier than taking a last determination. The court docket additionally famous that the only choose’s discovering that the report filed by BDO LLP didn’t look like a forensic report was clearly “perverse and liable to be ignored.”
In line with the judgment, BDO LLP is an accounting consultancy agency and has obtained forensic audit help from the Indian Banks Affiliation and SEBI. The court docket agreed with the financial institution’s argument that the only choose’s order undermines public confidence within the banking system.
On Monday (February 23, 2026), Ambani’s attorneys requested the HC to remain the order in order that they may method the Supreme Courtroom, however their request was rejected.
The sooner single court docket order had upheld all the present and future actions taken by Indian Abroad Financial institution, IDBI Financial institution and Financial institution of Baroda, stating that the actions have been primarily based on legally flawed forensic audits and have been in violation of RBI’s obligatory pointers.
The banks stated of their enchantment that the forensic audit that led them to categorise the accounts as “fraudulent” was legally legitimate and primarily based on important findings concerning the siphoning and misuse of funds.
Mr. Ambani had challenged a single court docket motion discover issued by the three banks, searching for declaration of his and Reliance Communications’ accounts as fraudulent.
As interim reduction, he sought an injunction to cease the notification and an injunction in opposition to enforcement motion on the grounds that the signatories of BDO LLP usually are not certified to conduct forensic audits as a result of they don’t seem to be licensed public accountants.
Ambani maintained that BDO LLP is an accounting consultancy and never an auditing agency. A single court docket agreed with Mr. Ambani and put the financial institution’s motion on maintain.
issued – February 24, 2026 4:32 PM IST
