On Tuesday, in a significant development for accountability in corporate lending and enforcement, the Supreme Court admitted a public interest litigation that accuses investigative agencies of turning a blind eye to the alleged complicity of public-sector banks, their officials, and statutory auditors in what is described as one of India’s largest banking frauds involving Anil Ambani-promoted companies. A Bench of Chief Justice B R Gavai and Justice K Vinod Chandran directed the issuance of notice to the Union of India, Central Bureau of Investigation, Enforcement Directorate, Anil Ambani, and other respondents.
The PIL, filed by former Union Secretary E A S Sarma through Advocate Prashant Bhushan, contends that thousands of crores of public money lent by banks to Reliance Communications Ltd (RCOM) and other Reliance ADA Group entities were systematically diverted, while financial statements were fabricated to conceal the true state of affairs. A CBI FIR registered in August 2024 and parallel ED proceedings, the petition submits, confine themselves to a narrow slice of the overall wrongdoing and deliberately exclude any scrutiny of the lenders and their officers who sanctioned and monitored the loans.
Forensic audits already placed before investigating agencies are said to have exposed grave irregularities, yet no action has been initiated against bank officials or the auditors. The Bombay High Court, in earlier proceedings, is stated to have taken judicial notice of the existence of systematic fraud and diversion of funds.
The Petitioner has prayed for a court-monitored investigation into the full extent of the alleged fraud, including the role of lending banks and their functionaries. Additionally, directions have been sought requiring the CBI and ED to place on record status reports specifically detailing the probe, if any, against the banks and their officials.
Appearing for the Petitioner, Prashant Bhushan pressed for urgent interim directions, highlighting the continuing inaction against the lenders despite clear evidence of institutional complicity.
After hearing the submissions, Chief Justice Gavai observed, “Issue notice… returnable in three weeks. Let them file their replies.”
The matter has been listed for further hearing after three weeks. The respondents, Union of India, CBI, ED, Anil Ambani, and other noticees, have been directed to file their counter-affidavits within the stipulated period.
The admission of the PIL places renewed judicial spotlight on whether investigative agencies can selectively probe corporate debtors while granting impunity to the financial institutions whose diligence failures allegedly enabled the fraud in the first place.
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