Industrialist Anil Ambani received a big legal blow on Monday. The Bombay High Court has lifted the interim stay preventing banks from taking action on fraud allegations. This decision paves the way for banks to classify their companies' accounts as 'fraudulent'.
What is the background of the controversy?
State Bank of India (SBI) and other lending banks had issued 'show cause' notices to Ambani's companies. This action was initiated based on serious discrepancies found in audit reports. Subsequently, Ambani approached the court, and in December 2025, a single bench temporarily stayed the banks' actions. However, now the bench has declared that order as “legally flawed” and has annulled it. The court clarified that if an order appears to be prima facie incorrect, it is not appropriate to keep it in force for a longer period.
Even the four-week deadline was denied
Ambani's lawyers had requested a four-week deadline for the next appeal. However, the court rejected this request and refused to maintain relief. As a result, banks have received the green light for further action.
Natural justice versus bank procedures
Ambani's argument was that the banks did not follow the principles of natural justice and he was not given a chance to present his case. However, the Reserve Bank of India (RBI) clarified the condition of personal hearings by amending the master circular in 2024. The court, considering these amendments and the issues in the audit report, refused to extend the stay.
What's next?
Now SBI and other banks can resume the process. If the accounts are officially declared as 'fraud', it may become more difficult for Ambani and his companies to obtain banking facilities in the future. This decision has caused a major stir in the business world, and everyone is watching to see what the next legal steps will be.