Mumbai: The Bombay High Court on Wednesday granted interim relief to Anil Ambani’s Reliance Communications (RCom) by restraining Bank of Baroda from taking any coercive steps on its September 4 order that classified the company’s loan accounts as “fraud”.
Next Hearing on September 24
A bench of Justices Riyaz Chagla and Farhan Dubash directed the Bank not to act till the next hearing scheduled for September 24. The court recorded that since the Bank has sought time to file a reply to RCom’s petition, it must place its affidavit on record by September 23. Until then, no action should be taken in furtherance of its impugned order.
RCom Challenges Fraud Tag
RCom had approached the High Court after Bank of Baroda labelled its accounts fraudulent, citing alleged diversion of funds, misuse of loans, and irregular transactions.
Appearing for Ambani, senior advocate Navroz Seervai argued that the Bank’s move was illegal since the forensic audit report (prepared by BDO) was commissioned by State Bank of India (SBI), the lead lender of a consortium, and Bank of Baroda was not part of that consortium.
Judges Allow Bank Time to Respond
The judges, however, observed that Bank of Baroda must be given a chance to present its stand. Seervai pressed for interim protection, pointing out that the fraud tag could trigger further criminal proceedings.
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RBI, SBI and CBI Angle
Opposing relief, counsel for the Bank said the RBI’s Master Circular mandates informing the central bank, and that details had already been shared with the Reserve Bank.
He added that SBI had independently categorised RCom’s accounts as fraudulent and had already approached the Central Bureau of Investigation (CBI). The agency had even sought details from Bank of Baroda. The court nonetheless directed the Bank to hold its hand till September 24.
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