Big win for Anil Ambani, order classifying loan account as ‘fraudulent’ withdrawn by…, court disposes of…
On Thursday, Canara Bank informed the Bombay High Court that it had withdrawn its classification of a loan account linked to industrialist Anil Ambani as “fraudulent.”
Following this disclosure, a bench comprising Justices Revati Mohite Dere and Neela Gokhale disposed of Ambani’s petition challenging the bank’s order, stating that the matter no longer required intervention.
The bench said the withdrawal order shall be informed to the Reserve Bank of India.
The loan account is linked to Ambani’s firm Reliance Communications, which is undergoing insolvency proceedings.
Anil Ambani Group Loan A/C Flag ‘Fraud’
On November 8, 2024, the bank had classified the loan account as “fraud” for reasons like the Rs 1,050 crore loan given in 2017 was actually sent to a group company to pay other liabilities which were connected or related parties.
The order was based on the RBI’s master circular related to fraud accounts that laid guidelines for such declarations. In February this year, the HC stayed the order pending hearing of the plea.
What Was HC’s Order On RBI’s Circular?
The High Court had raised concerns over whether the RBI would take action against banks that repeatedly violate its master circular and the Supreme Court’s directive, which requires that borrowers be granted a hearing before their accounts are labeled as “fraudulent.”
Ambani had challenged the Canara Bank’s order, stating that he didn’t get any hearing before his loan account was flagged as fraudulent.
He also stated that the fraud classification was issued on November 8, 2024, but was only communicated to him on December 25, after the HC had already stayed a similar classification in a related matter.
Ambani further claimed that Canara Bank had informed the RBI about the fraud classification as early as September 6, 2024, even before officially issuing the order.
(With Inputs From PTI)
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