Reliance Communications Banking Fraud Probe: Supreme Court Asks CBI, ED to Disclose Progress

The Bench of Chief Justice of India Surya Kant and Justice Joymalya Bagchi considered the plea, which called for a comprehensive probe by central agencies into large-scale loan defaults and alleged siphoning of public money through shell companies.

Appearing for the petitioner, Advocate Prashant Bhushan submitted that more than ₹1.50 lakh crore of debt owed by Reliance Communications and related entities had been written off by banks. He alleged that numerous shell companies were floated to siphon off loan amounts, resulting in massive losses to public sector banks.

Bhushan pointed out that Bank of Baroda had detected diversion of crores of rupees through shell entities, but despite this, the investigation had serious gaps. He flagged that the FIR in the case did not name any public servant under the Prevention of Corruption Act, despite the scale of the alleged fraud. According to him, the Enforcement Directorate and the Central Bureau of Investigation were required to explain what concrete steps had been taken so far.

At this stage, Solicitor General Tushar Mehta, appearing for the Union, told the Court that the government was not opposing the petitioner. “I am not opposing Mr. Bhushan,” the SG said, adding that a forensic audit had indeed been conducted and had found siphoning of funds for purposes other than those for which the loans were sanctioned.

The SG informed the Bench that based on the forensic audit findings, the State Bank of India had lodged an FIR with the CBI. He further clarified that while the forensic audit report was challenged on the ground that its signatory was not a chartered accountant, there was no stay on the declaration of fraud. He added that a writ petition filed challenging the audit report was subsequently withdrawn.

The CJI noted from the office report that respondents 4 and 5 (Anil Ambani Group and Anil Ambani) had been duly served but had not entered appearance before the Court. “In the interest of justice, and as a last opportunity,” the Bench permitted respondents 4 and 5 to appear on the next date of hearing and file their counter-affidavits. The Registry was directed to issue fresh notices to them.

The Court further directed that an additional set of notices be sent to the Registrar General of the Bombay High Court to ensure proper service. Responding to the Court’s observation, Bhushan argued that the matter had been widely reported in the media and that it could not be said that the concerned parties were unaware of the proceedings. “It’s not that they do not know. They are watching,” he said.

The CJI clarified that the Registrar General would ensure that fresh notices were duly served on respondents 4 and 5. The Bench also recorded that respondents 1 to 3 had already been served and had entered appearance.

Significantly, the Court directed the CBI and the Enforcement Directorate to file a status report on the ongoing investigation. The Bench ordered that if the investigation was still incomplete, the status report should be submitted in a sealed cover. The matter has been posted for further hearing after 10 days, on February 4. 

Case Title: EAS Sarma v. Union of India 

Bench: CJI Surya Kant and Justice Joymalya Bagchi

Hearing Date: January 23, 2026