The Bombay High Court has dismissed a petition filed by Anil Ambani challenging the State Bank of India’s (SBI) decision to categorize Reliance Communications’ loan account as “fraud.” The court ruled that there was no procedural irregularity in the bank’s action, effectively allowing SBI’s classification to stand.

High Court Upholds SBI’s Decision

The bench of the Bombay High Court observed that the petition lacked merit and found no violation of legal principles in SBI’s process. Ambani had approached the court seeking relief from the bank’s decision, arguing that the classification was arbitrary and made without affording him an opportunity for a personal hearing. However, the court concluded that due process had been followed and dismissed his plea.

Ambani’s Argument on Natural Justice

In his petition, Anil Ambani contended that SBI’s move to declare Reliance Communications’ loan account as fraudulent breached the principles of natural justice. He maintained that he was denied a fair chance to present his side before the decision was finalized. According to Ambani, this omission rendered the bank’s action unjust and procedurally flawed.

Court Finds No Procedural Lapse

After reviewing submissions from both parties, the Bombay High Court determined that SBI had acted within its authority and complied with established banking guidelines. The judges noted that financial institutions are empowered to classify accounts based on internal assessments and regulatory frameworks when evidence supports such action. The court emphasized that judicial interference is limited unless clear procedural violations are demonstrated—something not evident in this case.

SBI’s Fraud Classification Stands

With this ruling, SBI’s designation of Reliance Communications’ loan account as “fraud” remains valid. This classification carries significant implications for borrowers, often restricting access to further credit and triggering regulatory scrutiny. The judgment reinforces banks’ discretion in managing non-performing assets while adhering to Reserve Bank of India (RBI) norms governing fraud identification and reporting.

Possible Appeal Before Supreme Court

Although his petition has been dismissed by the Bombay High Court, Anil Ambani retains the option to approach the Supreme Court for further relief. Legal experts note that such appeals typically focus on questions of law or alleged procedural errors rather than re-evaluating factual determinations made by lower courts.

The dismissal marks another chapter in ongoing legal proceedings surrounding Reliance Communications’ financial obligations and its lenders’ recovery efforts. The case underscores how Indian courts continue to balance borrower rights with banks’ responsibilities in maintaining transparency and accountability within the financial system.