Overview
- The interim order stays all present and future fraud-classification steps by Indian Overseas Bank, IDBI Bank and Bank of Baroda against Ambani and Reliance Communications.
- The judge held the October 15, 2020 forensic report could not be relied on since it was not signed by a duly qualified chartered accountant and the auditor’s appointment did not meet Companies Act norms.
- The court criticized lenders for delayed action, noting transactions from 2013–2017, an audit initiated in 2019, a report in 2020 and show-cause notices in 2024, contrary to RBI timelines.
- The order warned that a fraud label carries ‘virtually drastic’ consequences including blacklisting, denial of credit, potential criminal FIRs, reputational damage and what it called ‘civil death.’
- The banks’ reliance on the 2016 Master Directions to defend the audit was rejected at this stage, a six‑week stay of the ruling was refused, conflict-of-interest concerns with BDO were flagged and the suits now proceed to final hearing.