In a significant ruling, the Bombay High Court has allowed a batch of appeals filed by public sector banks and BDO India LLP, setting aside the interim injunction granted by a Single Judge that had restrained banks from acting on a forensic audit report while proceeding against industrialist Anil D. Ambani.
A Division Bench comprising Chief Justice Shree Chandrashekhar and Justice Gautam A. Ankhad held that the Single Judge had exceeded the permissible limits of jurisdiction at the interlocutory stage by virtually adjudicating upon the legality and validity of the forensic audit report and the competence of the auditor, issues which go to the merits of the suit and are required to be decided at trial.
The appeals arose from interim orders passed in multiple suits filed by Anil Ambani challenging show-cause notices and fraud classification proceedings initiated by Bank of Baroda, IDBI Bank and Indian Overseas Bank, all of which were founded on a forensic audit report prepared in 2020 by BDO India LLP. The Single Judge had stayed all consequential actions by the banks, holding prima facie that the forensic report was not in consonance with RBI Master Directions and questioning the eligibility and independence of BDO as a forensic auditor.
Reversing these findings, the Division Bench held that the Single Judge impermissibly travelled beyond the pleadings and arguments advanced by the parties and returned sweeping findings on the auditor’s qualifications, independence and the validity of the forensic report. The Court observed that such determinations, particularly when they carry serious reputational and systemic consequences, cannot be made at the stage of deciding interim relief.
The Bench further held that the RBI Master Directions governing fraud classification and forensic audits could not be retrospectively applied to invalidate actions taken under earlier directions, in the absence of clear legislative or regulatory intent. The Court noted that banks are statutorily empowered to initiate fraud-related proceedings and that the mere challenge to the forensic report does not, by itself, justify a blanket stay on regulatory and contractual actions by lenders.
On the issue of interim relief, the Court found that the Single Judge had failed to apply settled principles governing injunctions, including the requirement of a strong prima facie case, balance of convenience, and irreparable injury. The Court held that the drastic consequences apprehended by the plaintiff could not eclipse the larger public interest and the statutory obligations of banks to act on suspected fraud.
Accordingly, the Division Bench allowed the appeals, vacated the interim injunction restraining the banks, and clarified that all issues on the validity of the forensic audit, eligibility of the auditor, limitation, and alleged violation of natural justice would remain open to be adjudicated at the trial stage on evidence.
APPEARANCES
For the Appellants / Applicants
In APPL/43022/2025 & IAL/43024/2025: Mr. Tushar Mehta, Solicitor General of India,
a/w Mr. Aspi Chinoy, Senior Counsel; Mr. Kevic Setalvad, Senior Counsel, a/w Mr. Jehan Lalkaka, Mr. Nishit Dhruva, Ms. Niyati Merchant, Mr. Yash Dhruva, Ms. Rajlaxmi Pawar and Mr. Harsh Sheth, Advocates, i/by MDP Legal.
In APPL/43081/2025 & IAL/43083/2025
Mr. Tushar Mehta, Solicitor General of India, a/w Mr. Zal Andhyarujina, Senior Counsel, Mr. Babu Sivaprakasam, Ms. Akansha Agarwal, Ms. Nandita Bajpai, Ms. Rahat Kalptri and Mr. Vijay Srinivasan, Advocates, i/by Yogesh Pirthani.
In APPL/43052/2025 & IAL/43054/2025
Mr. Zarir Bharucha, Senior Counsel, a/w Mr. Bimal Rajasekhar, Advocate, i/b Advocate Rishi Thakur and Ms. Dhwani Gala, Advocates.
For Respondent Nos. 2 and 3
In APPL/43022/2025 & IAL/43024/2025
APPL/43052/2025 & IAL/43054/2025
APPL/43081/2025 & IAL/43083/2025
Mr. Mustafa Doctor, Senior Counsel, a/w Mr. Kunal Dwarkadas, Mr. Rahul Dwarkadas, Ms. Prachi Dhanani, Mr. Raushan Kumar and Mr. Aniket Kharote, Advocates, i/by RJD & Partners.
Also appearing as Appellant / Applicant in
APPL/760/2026 & IAL/762/2026,
APPL/764/2026 & IAL/767/2026,
APPL/765/2026 & IAL/768/2026.
For Respondent No. 1
In APPL/43022/2025 & IAL/43024/2025
Mr. Mukul Rohatgi, Senior Counsel, a/w Dr. Birendra Saraf, Senior Counsel, Mr. Ameet Naik, Mr. Abhishek Kale, Mr. Sanjeevi Seshadri, Mr. Dhruva Gandhi, Mr. Devashish Jagirdar and Mr. Ronit Doshi, Advocates, i/by Naik Naik & Company.
In APPL/43081/2025 & IAL/43083/2025
Mr. Gaurav Joshi, Senior Counsel, a/w Mr. Ameet Naik, Mr. Abhishek Kale, Mr. Anand Mohan, Mr. Devashish Jagirdar and Mr. Ronit Doshi, Advocates, i/by Naik Naik & Company.
In APPL/43052/2025 & IAL/43054/2025
Mr. Ashish Kamat, Senior Counsel, a/w Mr. Ameet Naik, Mr. Abhishek Kale, Mr. Anand Mohan, Mr. Devashish Jagirdar and Mr. Ronit Doshi, Advocates, i/by Naik Naik & Company.
In APPL/760/2026 & IAL/762/2026
APPL/764/2026 & IAL/767/2026
APPL/765/2026 & IAL/768/2026
Mr. Mayur Khandeparkar, a/w Mr. Ameet Naik, Mr. Abhishek Kale, Mr. Devashish Jagirdar and Mr. Ronit Doshi, Advocates, i/by Naik Naik & Company.