Overview
- Justice Milind N. Jadhav stayed all present and future fraud‑classification steps by Indian Overseas Bank, IDBI Bank and Bank of Baroda against Anil Ambani and Reliance Communications.
- The court said RBI Master Directions are mandatory and that the BDO LLP report cannot be relied upon since it was not authored and signed by a duly qualified chartered accountant.
- The order flagged independence concerns over BDO LLP’s prior consultancy for the lenders and noted a written statement indicating no fraud or criminal breach was observed in the audit findings.
- The banks’ contention that the 2016 RBI framework did not require a CA and that later rules could not apply was rejected at the interim stage, with the court stressing auditor eligibility under applicable law.
- The bench criticized the lenders for delay in acting on transactions from 2013–2017 audited only in 2019 and warned that fraud tagging carries drastic consequences, granting interim protection pending further hearing.