SBI’s action against Anil Ambani arbitrary and discriminatory?

Reliance Group’s counsel has raised fresh concerns about State Bank of India’s action against its chairman and managing director Anil Ambani, stating that the principles of natural justice as laid down by the Supreme Court are not followed, and no personal hearing is allowed to the businessman. SBI’s ex-parte action against Ambani is in violation of the principles laid down by the top court, according to the counsel. SBI must reconsider its actions in this matter, as it has already withdrawn show-cause notices issued against five other non-executive directors, stated the counsel. 

The development comes at a time when Canara Bank — a member of the consortium of lenders to RCom — has unconditionally withdrawn its classification of the company and Ambani as fraud before the Bombay High Court on July 10. “By doing so, the Bank (Canara Bank) acknowledged that the earlier classification could not be sustained in law and chose not to pursue the matter further. This development highlights the inconsistency in the approach of different lenders within the same consortium, and raises questions as to why SBI continues to maintain its position on this matter,” according to the counsel. 

Earlier, legal counsel representing Anil Ambani had strongly objected to SBI’s move to classify Reliance Communications’ loan account as “fraud”. Stating that the PSU lender’s move was an “ex-parte order” issued by its Fraud Identification Committee (FIC), the counsel had in July stated that the action came nearly a year after the bank failed to respond to the company’s last communication.

The matter relates to SBI’s move to classify the RCom account as fraud and report Ambani to the RBI, raising concerns around procedural fairness and regulatory consistency. The action was taken through an ex-parte order–such orders are issued without a hearing–and based on a 2020 forensic audit related to a 2016 loan, despite no recent urgency or engagement from the bank for nearly a year.

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The recent actions of SBI, particularly in relation to RCom and Ambani, have raised serious concerns about the transparency, fairness, and impartiality of the bank’s decision-making process, according to RCom’s counsel. 

“SBI’s order was passed ex-parte, without giving Mr. Anil D. Ambani a chance to present his case. This denial of a fair hearing clearly shows that the Principles of Natural Justice as laid down by Hon’ble Supreme Court were not followed. Such one-sided decisions not only weaken confidence in the bank’s credibility but also set a troubling precedent for how financial institutions treat stakeholders, especially when the reputational and financial impact is severe,” said the counsel.

Anil Ambani not given a personal hearing

SBI’s order was passed without granting Ambani a personal hearing, noted the counsel. “This denial of the opportunity to present his case is a direct violation of the fundamental principles. By bypassing this essential safeguard, SBI’s action not only renders the order legally untenable, but also undermines confidence in the bank’s impartiality and credibility,” according to the company’s counsel. 

“What makes the matter even more concerning is that SBI’s action appears to contravene binding judicial and regulatory frameworks. Multiple judgments of the Hon’ble Supreme Court and the Hon’ble Bombay High Court — including State Bank of India v. Rajesh Agarwal (2023), T. Takano v. SEBI (2022), Ankit Bhuwalka v. IDBI Bank (2025), and Milind Patel v. Union Bank of India (2024) — have clearly established that no account can be classified as fraud without (i) complete disclosure of all relied-upon documents, and (ii) affording a personal hearing to the affected individual,” noted the counsel. 

Additionally, RBI guidelines mandate adherence to these principles. By ignoring such binding precedents and regulatory standards, SBI has acted in a manner inconsistent with the rule of law, noted the counsel. 

SBI has withdrawn show-cause notices issued against five other non-executive directors

The counsel said that SBI has withdrawn the notices issued to five other non-executive directors of RCOM, acknowledging that they had no role in the company’s day-to-day operations or financial decision-making. “This selective and inconsistent approach raises serious concerns, as such differential treatment undermines the principle of fairness, and weakens confidence in the impartiality of the Bank’s decision-making process,” said the counsel.

The five directors are: 

• Arun Kumar Purwar, Ex-Chairman, State Bank of India

• Raj Narain Murari L. Bhardwaj, Ex-Chairman & Managing Director, LIC

• Manjari Ashok Kacker, Ex-Member, Central Board of Direct Taxes

• Deepak Haridev Shourie, Ex-Director, BBC Worldwide Media

• Prof. Jayaraman Ramachandran, Ex-Professor, Corporate Strategy, IIM Bangalore

Key documents withheld

Adding to the concern is SBI’s refusal to provide Ambani with the very documents that form the basis of the show cause notice (SCN). Despite repeated requests, the Bank has shared only an incomplete copy of the Forensic Audit Report (FAR), with several annexures and key underlying documents withheld entirely, according to the counsel.

“For instance, the annexure that was supposed to contain critical revenue breakup details was furnished in an incomplete form, showing only icons instead of the actual data sheets,” said the counsel. 

Without access to these documents, Ambani has been denied the opportunity to make a meaningful and informed response to the SCN. This withholding of information is not a mere technical lapse; it undermines the very essence of due process, according to the counsel. 

“It is therefore essential that SBI reconsider its actions in this matter,” according to the Reliance Group counsel. 

“The Bank must withdraw the exparte order, disclose all documents forming the basis of the SCN, and provide Mr. Ambani with a fair opportunity to be heard in accordance with judicial and regulatory requirements. Anything less would not only perpetuate injustice in this case but also further damage the institution’s own credibility. By restoring adherence to law, fairness, and transparency, SBI can reaffirm its position as a credible and impartial guardian of India’s banking system and help rebuild public trust in the financial sector,” said the counsel.