Three banks appeal relief granted to Anil Ambani

MUMBAI: Three banks on Monday appealed against interim relief granted to industrialist Anil Ambani last month by a single-judge bench of the Bombay high court. The judge had restrained the lenders from taking action against Ambani’s accounts based on a forensic audit report (FAR) of 2020.The HC, had in Dec, agreed with Ambani’s contention that the FAR 2020 report essentially flouts a 2024 master direction issued by Reserve Bank of India on “fraud risk management in commercial banks”. Solicitor General Tushar Mehta, representing one of the banks in the appeal hearing before the HC division bench of Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad, argued that unless the order is stayed, it would lead to “disastrous” consequences.Mehta submitted that the findings recorded by Justice Milind Jadhav were not based on facts pleaded in the suit filed by Ambani or argued in court during the hearing of his plea for interim relief. He also argued that “the RBI master circular of 2024 has been given a retrospective effect, which is patently impermissible”.The audit report points to findings on facts, including that funds “were misused” and “siphoned off”, Mehta submitted in his submissions online from Delhi, adding that Ambani never challenged the FAR on merits.

The report by an external auditor was under a 2016 RBI circular, which was complied with, was the banks’ case.Ambani’s counsel earlier argued that the 2024 RBI master directions mandatorily superseded the earlier 2016 directions and require an “external auditor” appointed for forensic audits to be an auditor under the Companies Act.