The Delhi High Court Wednesday asked State Bank of India (SBI) to maintain status quo with regard to accounts of Anil Ambani's firms – Reliance Communication (RCom), Reliance Telecom and Reliance Infratel, which have been declared by the bank as fraud accounts.
According to the plea, the circular allows banks to declare an account as fraud without giving any prior notice or communication to the account holder against the principles of natural justice.
Justice Prateek Jalan passed the order on a plea by erstwhile directors of the three companies challenging a 2016 circular of the Reserve Bank of India (RBI) regarding declaration of accounts as fraud by banks.
Bar & Bench reports that the court also allowed SBI to issue a show cause notice to Rcom and its officials to hear them out after which a ‘reasoned order’ could be passed.
Their lawyers told the court that several similar petitions against the circular have been filed since 2019 and the petitioners in those matters have been protected by the high court.
In view of the orders passed earlier by the high court in similar matters, Justice Jalan directed State Bank of India to "maintain status quo till next date of hearing" with regard to the accounts of the three companies.
The Delhi HC further said that the respondents, including RBI and the three companies, were at liberty to file their replies to the petition by January 11 and listed the matter for hearing on January 13.
The Delhi High Court further said that SBI and RBI were at liberty to take any steps in the nature of an investigation or filing of complaint proceedings against the erstwhile directors and the three companies independent of the impugned action of declaring the accounts of the three companies as fraud accounts.
This comes a week after reports that SBI, the Union Bank of India (UBI) and the Indian Overseas Bank (IOB) marked Rcom account as fraud.