Anil Ambani bank fraud case: If public funds are siphoned off, willingness to pay may not help, says Supreme Court

The Supreme Court on Wednesday (February 4, 2026) said that if the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) uncover a deliberate intention to “absorb” public funds, even a willingness to pay cannot save those involved in a bank fraud allegedly linked to the Anil Dhirubhai Ambani Group (ADAG) and its promoter Anil Ambani from criminal prosecution.

A three-judge bench headed by Chief Justice of India Surya Kant directed the ED to constitute a Special Investigation Team (SIT) of senior officers to probe the scam, while ordering the CBI to conduct a “fair, impartial” investigation into “nexus, connivance, conspiracy, collusion” between bank officials, officials and company managements.

Also Read | Files reveal alleged links between Epstein, Anil Ambani and Delhi ‘leadership’

Chief Justice of India Kant, who headed the three-judge bench, told senior advocates Mukul Rohatgi and Shyam Divan, appearing for Mr Ambani and ADAG respectively: “If there is an intention to siphon public funds from the very beginning, such crimes cannot be further escalated just because you are ready to pay.”

The court was responding to Mr. Rohatgi’s suggestion that a committee could be constituted to examine the amount payable to banks. “I am not against SIT but the gentleman can pay the price instead of facing prosecution… They say money is being siphoned off. I deny the allegation,” the senior lawyer said.

Mr. Divan said in court that the “issued” amounts were not correct. He called to give an answer and was given time.

Also read | Supreme Court issues fresh notices on PIL to Reliance ADA Group’s Anil Ambani over alleged banking and corporate fraud

Speaking on behalf of CBI and ED, Solicitor General Tushar Mehta said that the forensic examiner had pointed out that public money amounting to around Rs 40,000 crore was siphoned off. Mr. Mehta said “it is not possible to become unified” if the actions involve misuse of public funds. The senior legal official said the actions involved issuing “fake bank guarantees”.

“The forensic report shows that money was taken from one bank to make payments to another,” Mr. Mehta said.

Seeking the constitution of an SIT and a thorough investigation into what they described as “one of the biggest financial scams in the country”, petitioner EAS Sarma’s lawyers Prashant Bhushan and Neha Rathi flagged the possibility of Mr Ambani fleeing the country.

Also read | Bombay High Court withdraws fraud notices against Anil Ambani; questions the compliance of banks

Making a strong objection to Mr Bhushan’s allegations, Mr Rohatgi said Mr Ambani had stated that he had no such intention and would remain in the country. In fact, Mr. Rohatgi said that he was in the office every day.

“I’m not running. I’m here,” Mr. Rohatgi said on behalf of his clients. Mr Bhushan said there was no point in making a statement after the organizer fled the country.

“The gentleman who owns these companies has not been arrested so far. He is the ringleader. There are outstanding dues of ₹ 1.78 lakh crore and only ₹ 15,000 crore has been recovered in insolvency cases… Only one former director of the company has been arrested so far, that too after the Supreme Court issued notice in the petition on January 23. Now, while the Supreme Court is monitoring the case, some preventive measures need to be taken against him leaving the country,” Mr. Bhushan said.

The Supreme Court noted Mr. Mehta’s statement that necessary preventive measures would be taken to ensure smooth conduct of the investigation.

The Supreme Court criticized the CBI and ED’s delay in recording the First Information Report in the case by nearly five years. It was stated that the findings of discrepancy came to light in a forensic audit report in 2020, but the FIR was registered only in 2025.

“If the forensic examiner said there was collusion, why RC? [Regular Case] Are you not registered?” Justice Joymalya Bagchi asked Mr. Mehta.

The court said it was quite “misunderstood” that the Central agencies thought that a prior sanction under Section 17A of the Prevention of Corruption Act was required to initiate an investigation into alleged collusion involving bank officials and other officials.

“CBI and ED have taken their own time to take action, no further delay will be allowed… The ED should constitute an SIT comprising senior officers and take all legal measures to investigate the case to its logical conclusion… There has been an inexplicable delay in starting the investigation,” the court emphasized.

The court also flagged how the Insolvency and Bankruptcy Code (IBC) was used by family members to devalue assets and buy them at a price well below their original market value.

“Reliance Communications Infra had outstanding debt of ₹47,000 crore. In case of bankruptcy, it was sold to its brother’s company for ₹455 crore,” Mr. Bhushan said. Mr. Rohatgi objected, saying anyone could come forward and buy.

However, the Bench took a skeptical approach and said that such cases of undervalued acquisitions taking advantage of the IBC platform are heading towards the apex court.

“Unfortunately, the IBC platform is misused like everything else. The company and its assets become undervalued. Then again, you go to a kind of pre-planned auction. Your friends or family come and buy. The valuation of the assets is not even 1% of the original market value,” Bench said.

It was published – 04 February 2026 12:01 IST