The Bombay High Court allowed appeals filed by Bank of Baroda, Indian Overseas Bank and IDBI Bank, thereby reviving the ‘fraud classification’ proceedings initiated by the lenders against the Reliance Group founder.

A Division Bench comprising Justice Shree Chandrashekhar and Justice Gautam Ankhad quashed and set aside the order of the Single Judge, Justice Milind Jadhav, who had stayed the banks’ fraud-tag proceedings against Ambani.

The Single Judge had granted interim protection to Ambani after recording a prima facie finding that the forensic audit relied upon by the banks suffered from serious defects. A key ground for the stay was the finding that BDO LLP, which conducted the forensic audit, was allegedly not a “competent” auditor under the RBI Master Circular on Frauds, 2024.

Allowing the appeals, the Division Bench disagreed with the approach adopted by the Single Judge and held that the interim stay on the fraud classification proceedings was not warranted. The Bench set aside the order staying the proceedings, thereby permitting the three banks to proceed further in accordance with law.