Supreme Court orders SIT probe into Anil Ambani’s Reliance Group over alleged bank fraud and collusion

The provision mandates prior sanction from competent authorities for prosecuting public servants.

Arguments on funds siphoning

On apprehensions raised by Advocate Prashant Bhushan, who appeared for the petitioner E A S Sarma, a former bureaucrat, that Anil Ambani might flee the country, the court recorded the assurance given by the Solicitor General Tushar Mehta said that “all preventive, remedial action will be taken to ensure that no impediment is caused in the ongoing investigation.”

Appearing for Anil Ambani, Senior Advocate Mukul Rohatgi also assured the court that “his client will not leave the country without the permission of this court.”

Rohatgi also proposed repaying the amount due to the banks.

“I am not averse to an SIT. I am not opposing anything. Since the government is also here. They say it’s siphoning; I say it’s not, but whatever it is, there could be business losses. If through the good offices of the court and government, if they can form a committee of finance people like SBI, RBI etc, and let’s have a look at it as to what is the amount due and if this gentleman or his companies can pay in some staggered way, that is one way to look at it rather than going on for prosecutions. I am stating so on instructions, said Rohatgi.

However, Solicitor General Mehta said it may not be possible to compound the alleged offences even if he repays. “We, the banks, conducted a forensic audit by an outside forensic auditor who said there is a siphoning and other things. We may not perhaps be able to compound these offences even if there is a readiness to pay,” said Mehta.

‘Nobody is running away’

Justice Bagchi referred to the CBI report, citing Section 17A of the PC Act, and told Mehta, “In spite of what you are submitting, see para 27 of the CBI report. You are dwelling on 17A again. If the forensic auditor says that there was a breach not of loan terms but of collusion, then what is the question of stopping the registration of RCs in view of taking sanction? Please examine”.

Mehta said, “The question is very pertinent. I have put it to CBI. The public officials are also under investigation”.

Bhushan pointed out that the CBI FIR dates to 2025, despite a 2020 audit report by the Bank of Baroda that explained how the funds were siphoned off. “So till 2025, the bank consortium did not lodge a complaint with CBI, and till today, only after the SC issued a notice, they effected the first arrest in the matter, the day before yesterday,” he said.

The court asked Mehta why CBI had not registered multiple FIRs. “The nature of offence may be the same, but don’t the transactions constitute independent offences?” the CJI asked.

Mehta said it will be looked into.

Rohatgi said CBI filed 5 FIRs, and ED registered 3 ECIRs based on those FIRs. He added that so far, property worth Rs 12, 000 crore has been attached, and over 100 summons have been issued to various people. “They are cooperating. Nobody is running away.”

CJI Surya Kant said, “If there is an intention to siphon the public funds from X to Y, Y to Z, from the very beginning and if that has already happened, then probably the SG is right in saying that this kind of offence can’t be condoned merely because you are willing to pay.”

Rohatgi said, “It is my case that there was no such intention. We have done business for 40 years.”

CJI Kant said that’s “precisely what has to be seen on the basis of the investigation” if it reaches the conclusion that the default took place for reasons beyond control.

Bhushan said ED, in its counter-affidavit, has found evidence of forged bank guarantees issued by the defaulting companies.

“That itself is a criminal offence. Therefore, I say it cannot be compounded,” said Mehta.

To which CJI Kant said, “We expect that your agencies must act fairly, independently, and very swiftly. We would like to have a status report every month. In four weeks, they must submit the report and let’s see how they take the investigation to what logical conclusion.”