BREAKING| Supreme Court Criticises ED & CBI Probe In ADAG Bank Fraud Case; Anil Ambani Undertakes Not To Leave India
The Court, criticising the delay on the part of CBI and ED, asked the agencies to take the investigation promptly to its logical conclusion.
The Supreme Court on Wednesday criticised the "unexplained delay" on the part of the Enforcement Directorate in investigating the alleged bank loan fraud of over Rs 40,000 crores by Anil Dhirubhai Ambani Group (ADAG) companies.
The Court also criticised the Central Bureau of Investigation (CBI) for registering only a single FIR with respect to the complaints received from various banks. The Court noted that one FIR was registered in 2025 on the basis of a complaint from the State Bank of India, and the subsequent complaints from other banks and financial institutions are also being investigated by enlarging the scope of the first FIR. The Court commented that the "said approach adopted by the CBI does not seem to be in conformity with the procedural law" as each complaint is a separate transaction, warranting a separate FIR.
The Court directed the CBI to investigate the possibility of collusion on the part of bank officers as well.
"Both ED and CBI have already taken time, and we therefore expect that both agencies will act promptly," the Court observed in the order. The Court further observed that "the ED is well advised to constitute a Special Investigation Team comprising senior officers and take all lawful measures to take the ongoing investigation to a logical conclusion."
A bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi, Vipul Pancholi was hearing a Public Interest Litigation filed by EAS Sarma, former Union Government Secretary, seeking a Court-monitored investigation into the matter.
Anil Ambani won't leave the country, undertaken given to the Court
Advocate Prashant Bhushan, for the petitioner, urged the Court to also restrain the group chairman Anil Ambani from leaving the country, saying that there are past instances of defaulters fleeing the country. Solicitor General of India Tushar Mehta, who informed the Court that LOCs have been issued against him, welcomed the Court passing any prohibitory order against Ambani.
At this juncture, Senior Advocate Mukul Rohatgi, Anil Ambani's lawyer, gave an undertaking that he won't leave the country without the prior permission of the Court. SG then said that Rohatgi had given a similar undertaking to the Delhi High Court years ago with respect to another individual, and despite that, he had fled the country. "But he came back and paid the amounts to the government," Rohatgi replied.
The Court recorded the undertaking of Rohatgi, as well as the statement of the SG that all preventive and remedial action will be taken to ensure that no impediment is caused in the investigation.
Rs 40,000 crores siphoned off : SG tells the Court
At the outset, Solicitor General of India Tushar Mehta informed the Supreme Court that the funds alleged to be siphoned off through bank loan frauds by the Anil Ambani Dhirubhai Ambani Group companies are worth around Rs 40,000 crore.
SG further informed that the Enforcement Directorate and the Central Bureau of Investigation have filed their separate status reports regarding the investigation.
When the SG said that the FIR was registered on the basis of a complaint by the State Bank of India, CJI Surya Kant asked why separate FIRs were not registered with respect to the complaints from other banks.
"The first FIR came from the State Bank of India. Thereafter,other banks also informed us about alleged siphoning; they are also part of the same FIR now," SG said.
CJI Kant said that complaints from other banks constitute separate transactions and hence separate FIRs could be registered. SG said that this aspect will be examined.
Advocate Prashant Bhushan, for the petitioner, submitted that the first report about the misappropriation of funds came from the Bank of Baroda in 2020; but the FIR was registered only in 2025 after a complaint from the SBI. Bhushan further submitted that the first arrest in the case happened only two days back, after the Court issued notice in the matter(ED had arrested former R-Com director Puneet Garg last week).
Senior Advocate Mukul Rohatgi, appearing for Anil Ambani, suggested that a committee can be formed by the Government to look at what is the amount dues. He denied that there was any siphoning off of funds and claimed that genuine defaults should not be criminalised.
"I have a proposal to make- in the sense, since the govt is here, if to the good offices of the Court, they can form a committee and let's have a look at it, what amount is due, that is one way to look at it, instead of going for prosecution, these are my instructions," Rohatgi submitted.
Senior Advocate Shyam Divan, for the Anil Ambani Dhirubhai Ambani Group, submitted that two group companies -Reliance Power Ltd and Reliance Infrastructure Ltd - have paid back Rs 20,000 crores. "These companies are in the nature of paying back. We are trying to ensure that the payments are being made. There is no question of siphoning," Divan said.
SG said that it will have to be examined if some companies paid back the amounts by taking money from the loans availed by the other companies.
Bhushan submitted that Reliance Communications, having Rs 47,000 dues was sold off to the brother's company for about Rs 430 crore, at about 1%. CJI at this juncture commented that the "IBC is being misused like anything."
In the order, the Court recorded the details from the ED's affidavit (explained below).
Previously, the bench asked for status reports from the Central Bureau of Investigation(CBI) and the Directorate of Enforcement (ED) with respect to their ongoing investigation into the alleged bank frauds perpetauted by Anil Dhirubhai Ambani Group companies and their promoter Anil Ambani.
What does ED affidavit say?
In the affidavit filed in the Court, the ED informed that it has registered three Enforcement Case Information Reports under PMLA in relation to Reliance Commercial Finance Limited and Reliance Home Finance Limited, Reliance Communications Limited and Reliance Power Limited. In addition, three separate cases under the Foreign Exchange Management Act are also under investigation.
According to the affidavit, the PMLA probes have resulted in the issuance of 13 provisional attachment orders, covering 204 properties valued at about ₹12,012 crore. The agency said it has conducted 46 searches, issued 305 summons, recorded 213 statements, made four arrests and filed two prosecution complaints. Fourteen Look Out Circulars have also been issued.
In the RCFL and RHFL matters, the ED alleged large-scale diversion and misuse of public funds borrowed from banks and financial institutions. It claimed that defaults amounting to over ₹7,500 crore in RHFL and over ₹8,200 crore in RCFL led to substantial losses to lenders, with the proceeds of crime quantified at over ₹5,000 crore in the two cases.
With respect to Reliance Communications, the agency stated that loans exceeding ₹40,000 crore were availed from Indian and foreign banks and financial institutions, with proceeds of crime assessed at over ₹20,000 crore. Assets worth ₹8,078 crore have been provisionally attached in this case. The ED also informed the Court that former RCOM director Punit Garg has been arrested in connection with the probe.
In the Reliance Power matter, the ED alleged that forged bank guarantees were submitted to the Solar Energy Corporation of India through subsidiaries, resulting in a loss of over ₹105 crore of public money. Searches, seizures and attachments have been carried out and prosecution complaints have already been filed before special PMLA courts.
What Is The Plea About?
The petitioner contends that the present investigation being conducted by the CBI and Enforcement Directorate is narrow, incomplete, and deliberately excludes the role of bank officials and public servants, despite detailed material indicating their complicity. He submits that judicial supervision is essential to ensure a coordinated, transparent and comprehensive probe covering all offences revealed in multiple forensic audit reports, technical analyses and investigative publications.
According to the petition, Reliance Communications and its group companies cumulatively received Rs. 31,580 crore in loans between 2013 and 2017 from a consortium led by State Bank of India. A forensic audit commissioned by SBI and submitted in October 2020 reportedly uncovered diversion of thousands of crores through related parties, shell firms, circular transactions and sham asset purchases. However, despite these findings, SBI lodged a formal complaint only in August 2025, nearly five years later, a delay the petitioner says cannot be explained without examining whether bank officials acted to shield the borrower group.
The CBI thereafter registered an FIR alleging conspiracy, cheating and criminal breach of trust, causing an alleged wrongful loss of Rs. 2,929 crore. The petition argues that the FIR covers only a fraction of the alleged misconduct and ignores grave offences such as diversion through non-existent bank accounts, evergreening of loans, fictitious entries, and the use of conduit entities like Netizen Engineering Pvt. Ltd. and Kunj Bihari Developers Pvt. Ltd., which were found to be untraceable at their registered addresses.
Multiple materials placed before the Court, including forensic audits of Reliance Communications, Reliance Infratel, Reliance Telecom, Reliance Capital and related companies, reportedly reveal a pattern of large-scale siphoning of public funds, layering of transactions and violations of statutory and regulatory frameworks such as the Companies Act, FEMA, SEBI norms and RBI directions.
The petition stresses that bank officials involved in sanctioning, monitoring and overlooking these transactions are “public servants” for the purpose of the Prevention of Corruption Act. Their conduct, it argues, forms an integral part of the alleged conspiracy and must be investigated. Excluding them from scrutiny, it says, renders the ongoing probe constitutionally deficient and violative of Articles 14 and 21.
The petitioner has also placed reliance on a recent investigative report by Cobrapost which claims that companies across the Anil Ambani Group diverted funds amounting to nearly Rs. 41,921 crore, including Rs. 28,874 crore from domestic borrowings and approximately Rs. 13,047 crore routed into India from abroad through offshore entities in Mauritius, Cyprus and the British Virgin Islands.
The petition further cites subsequent forensic audits, including the 2022 audit of Reliance Capital, which allegedly uncovered reckless inter-corporate deposits of nearly Rs. 16,000 crore, arbitrary devaluation of securities and repeated violations of lending policies. It also points to a Grant Thornton report prepared during insolvency proceedings which details preferential and undervalued transactions to the detriment of creditors.
Despite searches at more than thirty-five premises, the petition claims that no arrests have been made and no significant assets have been frozen, reflecting institutional difficulty in carrying out an effective investigation without judicial oversight. Given the magnitude of public money involved and the alleged institutional dimension of the fraud, the petitioner argues that a court-monitored probe is essential to ensure fairness and restore public confidence.
The petition also seeks the constitution of an expert committee under the supervision of the Supreme Court to recommend structural reforms to prevent recurrence of similar financial scandals.
Case : EAS Sarma v. Union of India and others |W.P.(C) No. 1217/2025