The Bombay High Court has granted interim relief to Anil D. Ambani by suspending all steps taken by Indian Overseas Bank, IDBI Bank and Bank of Baroda that were based on a forensic audit report used to trigger fraud classification proceedings against him. The ruling was delivered on December 24, 2025, by Justice Milind N. Jadhav in three connected civil suits filed by Ambani.

At the heart of the dispute are show-cause notices issued by the banks under the Reserve Bank of India’s fraud risk management framework. These notices relied on a forensic audit report submitted in October 2020 by BDO LLP, which had been appointed by lenders during the financial stress faced by Reliance Communications and related telecom entities.

Ambani challenged the very foundation of the proceedings, arguing that the audit firm and its signatory were not qualified chartered accountants under Indian law and therefore lacked the authority to conduct such an audit. He also alleged serious procedural lapses, including denial of a fair hearing during the audit process, selective examination of records, and non-disclosure of key documents.

The court, after examining RBI guidelines, statutory provisions and the audit record, held that the issue of auditor eligibility goes to the root of the matter. It observed that a forensic audit forming the basis of fraud classification must be conducted by professionals qualified under applicable statutes, and prima facie found that this requirement was not met in the present case.

Justice Jadhav also noted that the audit appeared incomplete and inconclusive, with several bank accounts and transactions left unexplored. The prolonged delay between submission of the audit report and issuance of the show-cause notices further weakened the banks’ case at the interim stage.

Applying the established test for grant of injunction, the court concluded that Ambani had demonstrated a strong prima facie case, that the balance of convenience favoured him, and that allowing the fraud proceedings to continue could cause irreversible reputational and financial harm. The court emphasised that a fraud label carries severe consequences, including blacklisting and loss of credit access, even before any final determination.

Accordingly, the High Court stayed all actions stemming from the disputed forensic audit report and the related show-cause notices, pending final adjudication of the suits. The banks’ request to keep the order in abeyance was rejected, allowing the relief to take immediate effect.

The ruling is being seen as an important judicial scrutiny of forensic audits used in banking fraud cases and could have wider implications for similar proceedings across the financial sector.