The Supreme Court of Bombay ruled that industrial Anil Ambani was not entitled to a personal hearing for the State Bank of India (SBI) Classified Reliance Communications LTD (RCM) as a fraud, with the bank’s order maintained. It ruled that the bank had complied with the principles of natural justice by allowing written representation.
In a detailed order made available on Tuesday, a bank of Justices Revati Mohite Dere and Dr. Neela Gokhale, while rejecting Ambani’s petition, “
Forensic audit report and permitted to submit their representation before their account is classified as fraud. “
“The right is one of representation, not necessarily of personal hearing. In fact, the right to representation is not specifically read as a right to personal hearing,” the bank said.
The court noted that the Listen to the other side Principle (right to be heard) does not automatically mean an oral hearing unless explicitly provided by the law.
“The allocation of a personal hearing is not in all cases. As long as the petitioner had a sufficient opportunity to submit his objections in writing, the requirement of fairness and compliance with the principles of natural justice was satisfied,” the bank said.
The bank assessed the timeline that shows that SBI had issued a Show-Cause notion in December 2023 after a forensic audit of RCOM, followed by several letters looking for the reaction of Ambani. Despite the fact that he was set up with the full forensic audit report in September 2024, the court noted that Ambani “did not respond within the extensive timelines, nor for a personal hearing”.
In concluding that the action of the SBI was legal, the court said: “The disputed order is a motivated order and no weakness can be found in the same.”
The court also concluded that if proceedings were started against the company or a company organ, to classify the account of that company as a fraud account, and it was proclaimed as one, the promoter/directors who had control over the business of the company, would be automatically liable for criminal measures.
“You can be reported as fraud, more in particular, when the promoter/director has control over the company and is responsible for the actions and omissions of the company,” said it.
The bank stated that the annual reports of RCC about which dependence was placed by SBI “clearly revealed it clearly in his disputed order that the person submitted was the promoter and the person who was in control of the company”.
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