Whalesbook
Banks Challenge Ambani Court Relief
Three banks on Monday initiated an appeal against the interim relief granted to industrialist Anil Ambani last month. A single-judge bench of the Bombay High Court had previously restrained the lenders from taking any action against Ambani’s accounts. This action was specifically based on a contentious forensic audit report (FAR) from 2020.
Banks' Legal Arguments
Representing one of the banks, Solicitor General Tushar Mehta argued before a division bench that the original order would lead to "disastrous" consequences if not stayed. Mehta asserted that the findings by the single judge were not grounded in the facts presented in Ambani's suit or during his plea hearing. The banks contend that the 2024 Reserve Bank of India master direction on fraud risk management was improperly given retrospective effect.
The RBI Directive Dispute
The core of the dispute revolves around the application of RBI directives. Ambani's legal team argued that the 2024 master directions mandatorily superseded earlier 2016 guidelines, particularly concerning the appointment of external auditors for forensic audits. The banks, however, maintain that the 2020 audit report and its findings, including allegations of funds being "misused" and "siphoned off," were prepared under the compliant 2016 RBI circular. They emphasize that Ambani had never challenged the FAR on its merits.