Jai Anmol Ambani
Delhi High Court on Friday canceled the decision of Union Bank of India in which the bank account of the company of industrialist Anil Ambani's son Jai Anmol Ambani was declared a fraud. Justice Jyoti Singh gave this order on the petition of Jai Ambani, who argued that the bank took this decision without issuing any show cause notice or hearing him, thereby violating natural justice.
Ambani said that this move is against the Supreme Court's decision in the State Bank of India vs. Rajesh Aggarwal case, which said that before declaring the account as fraud, the borrower should be given first notice and an opportunity to respond. Senior advocate Rajeev Nair, appearing for Ambani, said that the affidavit of Union Bank of India revealed that the show cause notice was given at an address which was vacated by the company in September 2020 itself.
The High Court said that this would mean that no show cause notice was given to Ambani before declaring his account as a fraud. The court ordered that this court believes that no show cause notice was ever given before declaring the fraud. Therefore, as per the decision, the impugned classification and declaration is cancelled. However, the court also said that the court's decision will not stop the bank from issuing a fresh show cause notice to Ambani and taking action in the case.
Justice Jyoti Singh said that the bank will have to provide all the materials and documents along with the fresh notice to Ambani so that he can file the reply and once he files the reply, a fresh order can be passed. Actually, CBI has registered cases against Anil Ambani group companies on allegations of fraud worth about Rs 14,853 crore.
The investigating agency alleged that Jai Anmol Ambani defrauded Union Bank of India and caused a loss of approximately ₹228 crore to the public sector bank. Reliance Home Finance Limited, where Jai Anmol Ambani was a director, borrowed substantial funds but failed to meet repayment obligations. A forensic audit reportedly found that the loan proceeds were diverted and misused instead of being used for their sanctioned purposes, leading to the account falling into NPA status. Union Bank claimed wrongful loss of around Rs 228.06 crore and after classifying the account as a fraud, filed a complaint with the CBI alleging criminal conspiracy, fraud and misconduct.
