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The Delhi High Court on Monday refused to stay the show-cause proceedings initiated by Union Bank of India against Jai Anmol Ambani, but expressed its serious doubts about the rationale behind the bank's move in the backdrop of the completed insolvency process of Reliance Home Finance Ltd.
Justice Jasmeet Singh stated that the impugned show-cause notice dated December 22, 2025 relates to alleged fraudulent transactions in RHFL's account, despite the company having already undergone insolvency proceedings under the IBC. The Court pointed out that the resolution plan had been approved by the lenders, including Union Bank, and had also received approval from the Supreme Court of India, raising questions about the sustainability of the bank's action. "A notice must have some meaning. Why issue a show-cause notice after the resolution plan has been approved? Have you said anywhere that the plan was wrongly approved or that there was any fallacy in it?" the Bench asked counsel for the bank. While declining to interdict the proceedings at this stage, the Court directed Ambani to submit his reply to the notice and appear before the bank, either in person or through an authorised representative, for a personal hearing. Union Bank has been asked to pass a reasoned and speaking order after hearing him and to place the order before the Court on the next date of hearing. The Bench clarified that the effect of any decision taken by the bank would remain subject to the final outcome of the writ petition. The matter has been listed for further hearing on February 27. The directions were passed on Ambani's plea challenging the show-cause notice. Earlier, the High Court had set aside Union Bank's decision to classify the account of a company linked to Ambani as fraudulent, holding that the action had been taken in violation of the principles of natural justice. During the hearing, senior advocate Rajiv Nayar, appearing for Ambani, argued that the December 22 notice is inherently flawed as the RHFL resolution plan has already attained finality. He further submitted that even on the bank's own case, the notice is based on a forensic audit pertaining to the year 2020 and has been issued after an unexplained delay of nearly five years. Counsel appearing for Union Bank opposed the plea, contending that the matter is still at the show-cause stage and that no interference was warranted at this juncture. After considering the rival submissions, the Court reiterated that it was not staying the proceedings but emphasised that Ambani must be granted a fair hearing and that the bank's decision would be open to judicial scrutiny. Separately, the Central Bureau of Investigation has registered cases against companies of the Anil Ambani group over alleged frauds totalling nearly Rs 14,853 crore. In relation to Jai Anmol Ambani, the CBI has alleged that Union Bank suffered a loss of around Rs 228 crore, claiming that loan proceeds availed by RHFL where he served as a director were diverted and misused, leading to the account becoming a non-performing asset. Last month, in a separate ruling, the Delhi High Court overturned Union Bank's decision to label the account as fraudulent. Justice Jyoti Singh held that the bank had acted without issuing a valid show-cause notice or granting an opportunity of hearing, in breach of the principles of natural justice. The Court relied on the Supreme Court's judgment in State Bank of India v. Rajesh Agarwal, which mandates prior notice and a hearing before a borrower's account can be classified as fraudulent. (ANI)
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