Investigation Agencies Must Join Hands To Unearth Political Connivance Of Public Functionaries: Supreme Court Says In Anil Ambani Group Bank Fraud Probe

The Supreme Court, during the hearing of the Public Interest Litigation (PIL) seeking a comprehensive investigation into various banking institutions regarding alleged bank fraud involving the ADAG and its promoter, Anil Ambani, directed the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) to conclude their probes in a "time-bound, transparent, and fair" manner.

Reviewing status reports that now estimate total wrongful losses at a staggering ₹73,006 crores, the Court emphasized that the investigation must inspire confidence among all stakeholders and unearth any potential "political connivance" of public functionaries within financial institutions.

Previously, on February 4, 2026, the Court had expressed strong dissatisfaction with the "unexplained delay" by the Enforcement Directorate (ED) and the procedural lapses of the Central Bureau of Investigation (CBI) regarding the alleged siphoning of ₹40,000 crores by the Anil Dhirubhai Ambani Group (ADAG).

The Bench comprising Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice Vipul Pancholi ordered, "As the facts speak for themselves, this is a case where the investigating agencies must join hands and make vigorous attempts to unearth irregularities, illegalities, or the political connivance of public functionaries—especially within financial institutions—in giving undue benefit to the management. While we do not express any opinion on the merits of the allegations, all that we wish to observe is that it is imperative upon the CBI and ED to complete the investigation in a most dispassionate, fair, transparent, and independent manner and take the ongoing investigations to their logical conclusion in a time-bound manner. The Solicitor General of India assures that no stone shall be left unturned in unearthing the truth and that an endeavor shall be made to complete the investigation within four weeks. The Solicitor General, however, at this stage has pointed out the second status report filed by the Enforcement Directorate, which requests logistical support from financial institutions and other concerned authorities. While a formal prayer was not made by the Enforcement Directorate, we allow the request in its entirety. All concerned agencies, financial institutions, or other persons are directed to extend full cooperation to the Enforcement Directorate and make available the necessary information. Post this matter on..."

Advocate Prashant Bhushan appeared for the Petitioner, Senior Advocate Mukul Rohatgi appeared for Anil Ambani, Senior Advocate Shyam Divan appeared for the Anil Ambani Dhirubhai Ambani Group, and Solicitor General of India Tushar Mehta appeared on behalf of the CBI and ED.

The Court also ordered, "In reference to our order dated 4th February 2026, two status reports have been filed by the Enforcement Directorate and the Central Bureau of Investigation...The ED, in its report, has pointed out that an SIT was constituted on 12th February 2026 to investigate the cases connected to Reliance. The SIT comprises an Additional Director and two Deputy Directors of the ED. There are also two Deputy Directors, four Assistant Directors, and four investigating officers of the ED. Some forensic analysts and two staff members of the Bank of India have also been taken as part of the SIT. It is pointed out that investigations/enquiries into eight cases have commenced. Some documents have been seized. It is not necessary for us to refer to the nature of the documents which are said to have been seized."

The Enforcement Directorate confirmed the constitution of a Special Investigation Team (SIT) on to spearhead the probe. This high-level team comprises an Additional Director, two Deputy Directors, four Assistant Directors, and four investigating officers, supported by forensic analysts and banking experts.

Solicitor General Mehta submitted, "As per your Lordship's last order, we have constituted an SIT of ED officials and the investigation is going on. You will find an additional updated status."

CJI Kant said, "An SIT comprising officers from different wings—different investigating wings of a company."

Rohatgi submitted, "I appear for R4 and R5. Now that the investigation is going on, I am not opposing any investigation. I have a prayer, my Lord. I have made a representation to these banks to enter into a dialogue, my Lord, to see if there can be any fruitful resolution by payment of monies in a standard form."

Mehta intervened and said, "Sir, the criminal offense is separate; a civil dispute being settled with money is different."

Rohatgi respondend, "I am not saying that, sir. Please, please allow me. I am only saying, let the banks have a dialogue with me. They are not willing to have a dialogue because of the pendency of the case."

Chief Justice Kant said to Rohatgi, "Mr. Rohatgi, we have not stopped anyone, and we know that the banks will open—they will happily enter into one, because now that would be another way for them to wriggle out of the consequences, if any."

Solicitor General Mehta submitted, "And for the CBI we have entrusted—we have constituted—three transaction auditors to go into the audit transactions. Because there may be collusion, or there may not be collusion, your Lordship's last direction was that everything needs to be investigated—the role of everyone involved in the process."

Bhushan stated, "The problem is that despite SEBI's detailed report in this matter where they say, "The findings made in the foregoing paragraphs of this order have established the existence of a fraudulent scheme orchestrated by Noticee Number 2 (whom Mr. Rohatgi is representing) and administered by KMPs of RHFL to siphon off funds from the publicly listed company RHFL by structuring them as loans to credit-unworthy conduit borrowers and, in turn, to onward borrowers, all of whom have been found to be promoter-linked entities. So, SEBI has already given a very detailed report—a 200-page order after an investigation—saying that this is a scheme to siphon off money from these companies orchestrated by Anil Ambani, my Lord, Respondent Number 4 and Respondent Number 5. And yet SEBI has not effected any arrest so far."

Mehta said, "I am sorry, just to factually place the position: we have arrested four individuals so far. We cannot arrest randomly; it has to follow the investigation. But the investigation is ongoing."

Justice Kant remarked, "We cannot say who should be arrested or who should not be arrested, because we don't want that to be taken as an interference in the investigation. But the way your investigating agencies have shown reluctance, or allowed things to go the way they want, is not acceptable. They should come out in a time-bound manner, in a transparent and fair manner, with what they have concluded after holding the investigation. Your investigation must inspire confidence—not only the confidence of the Court, but the confidence of every stakeholder—so that people feel that, yes, you have come out with a fair and completely independent investigation."

Mehta responded, "Your Lordships' concern is very justified, and it would be conveyed in even harsher terms by me personally to the Directors of the ED and the CBI. We have attached ₹15,000 crores worth of property. But since the investigation is ongoing, my Lord, I may not say much."

The CBI informed the Court that seven cases are currently under active investigation, specifically focusing on the role of public servants. To assist in this, the agency has appointed three transaction auditors to determine if there was active collusion between bank officials and the ADAG management. The Court reiterated that the investigation must look into the "nexus and conspiracy" regardless of previous procedural hurdles, ensuring that every stakeholder involved in the loan disbursement process is held accountable.

The Court ordered, "In addition, there is a reference to "Project HELP," which is said to have revealed how insolvency petitions were deliberately initiated through unrelated lenders. According to the report, all funding by IBC acquisitions was arranged through a group of eight NBFCs owned by the NBFC Group. Details are given regarding other documents as well. On an illustrative basis, it is pointed out that claims of approximately ₹2,983 crores were extinguished for a total settlement of ₹26 crores."

"The status report filed by the CBI claims that seven cases are under active investigation in which the roles of public servants are also being investigated. The details of the five latest cases have been briefly pointed out, suggesting that the total wrongful loss suffered by the complainant bank runs into ₹2,223 crores in one case alone. The amount of loss suggested in other cases also runs into thousands of crores, with the total loss being approximately ₹73,006 crores", the Court said.

The Court had previously directed that the ED must immediately constitute a Special Investigation Team (SIT) of senior officers to conclude the probe. The Court further had criticized the CBI for merging multiple bank complaints into a single FIR, noting that each unique set of facts constitutes an independent offence.

Advocate Prashant Bhushan, appearing for the Petitioner, had highlighted that despite Bank of Baroda detailing the siphoning methods, no complaint was registered until 2025. He alleged that the Enforcement Directorate (ED) report indicated at least ₹26,000 crores were moved offshore, yet the "kingpin" remained at large. Bhushan further argued that the Insolvency and Bankruptcy Code (IBC) process was being misused, a sentiment echoed by the CJI, who remarked that assets were often undervalued and bought back by family members.

In response to the allegations of delay, the SG had stated that public officials were also under investigation for potential collusion. Mehta also informed the Court that approximately ₹40,000 crores were allegedly siphoned off.

Senior Advocate Mukul Rohatgi had proposed the formation of a committee to settle the dues as an alternative to prosecution. However, the CJI rejected the idea of a committee, stating that the court expected the ED and CBI to perform an independent and fair job without further impediments.

The Court had also remarked on the "misuse" of the Insolvency and Bankruptcy Code (IBC), following submissions that Reliance Communications, with debts of ₹47,000 crores, was sold for a fraction of its value. While Senior Advocate Shyam Divan claimed that two group companies had repaid ₹20,000 crores, the SG countered that authorities must verify if these repayments were funded by loans diverted from other group entities.

Accordingly, the matter is now listed for a further date.

Cause Title: EAS Sarma v. Union of India and others [W.P.(C) No. 1217/2025]