Prashant Bhushan Seeks Registration Of FIR Agains Anil Ambani's Reliance Group For Fraud; Says Anil Ambani's Passport Be Cancelled
Advocate Prashant Bhusan has addressed a letter to authorities, seeking immediate registration of F.I.R./ Regular Case by Central Bureau of Investigation against Mr. Anil Ambani's Reliance Group; Reliance Communication Ltd (RComm), Reliance Telecom Ltd (RTL) and Reliance Infratel Ltd. in light of news reports alleging claims owed to it to the tune of 85000 crore.
"I am making the instant representation seeking immediate registration of F.I.R./Regular Case by Central Bureau of Investigation against Mr. Anil Ambani's Reliance Group - Reliance Communication Ltd (RComm), Reliance Telecom Ltd (RTL) and Reliance Infratel Ltd- whose banks accounts have been declared as “fraud” by State Bank of India. It is further requested that Mr. Anil Ambani’s passport is immediately cancelled. It may be noted that Mr. Anil Ambani had taken huge loans (running into tens of thousand of crores) from various banks and had apparently siphoned off large 3 chunk of that public money. Therefore, the banks were constrained to declare the bank accounts of his companies as “fraud”."
- Bhushan states in his letter
Bhushan has highlighted news reports of NDTV and Business today.
“At the time of filing of bankruptcy, creditors had claimed Reliance Communications owed over 49,000 crore Reliance Infratel owed over 12,000 crore and Reliance Telecom owed it over 24,000 crore according the data made available on the website of the Rcom.”
In this context, he states that it is clear that alleged misappropriation, diversion and siphoning of funds have come to light during audit of the bank accounts of Reliance Communication Ltd (RComm), Reliance Telecom Ltd (RTL) and Reliance Infratel Ltd. Further, he adds that the said fraud amounts to tens of thousand of crores which is a financial scam of much larger proportion than the scams which have been unearthed in the cases of Mr. Nirav Modi and Mr. Vijay Mallya.
Moreover, he also made a plea so as to confiscate Mr. Anil Ambani’s passport taking into consideration the past precedence of Mr. Nirav Modi and Vijay Mallya fleeing the country in order to escape investigation and prosecution.
The aforementioned RBI circular states, which had been reiterated in CVC circular that,
“6.1 In dealing with cases of fraud/embezzlement, banks should not merely be actuated by the necessity of recovering expeditiously the amount involved, but should also be motivated by public interest and the need for ensuring that the guilty persons do not go unpunished. Therefore, as a general rule, the following cases should invariably be referred to the State Police or to the CBI”
If in case of the Public Sector Banks the default is more than 500 million then the case is to be referred to the Joint Director of CBI, Bhushan has stated.
While making this representation, he has referred to four High Court judgements which while being quintessential to the case at hand, have also laid down the following ratios:
1) Punit Garg & Ors vs State Bank of India
Issue: “The challenge is primarily on the ground that the process of declaration of an account as a “fraud” account is violative of the principles of natural justice, as it does not require any prior notice or communication to the account holder”
Held: “it is directed that the respondents shall maintain status quo until the next date of hearing. The respondents are free to issue a show cause notice to the petitioners and respondent nos. 3 to 5, and to give them a hearing, through video conferencing, if necessary. The respondents may also pass a reasoned order in accordance with law. The respondent nos. 1 and 2 are also at liberty to take any steps in the nature of investigation by filing complaint proceedings”
2) Punit Garg & Ors vs State Bank of India
3) Apple Sponge and Power Ltd and Ors. Vs. Reserved Bank of India
Issue: "What is the difference between wilful defaulters and fraud and the administrative procedure for inquiry followed thereof?"
Held: “To me it prima facie appears that declaring an account as ‘fraud’ would arise in a case of egregious default on the part of an account holder, something more than the account holder being a ‘wilful defaulter’. For an account to be declared as ‘fraud’ must entail an element of criminality on the part of the account holder, which ought to be inferred only on the basis of some substantial material which must be put to the errant account holder; and after considering any explanation such account holder has to offer; and not unilaterally by a stroke of the pen.”
4) Apple Sponge and Power Ltd and Ors. Vs. Reserved Bank of India dt 16.06.2020
Issue: “challenging the circular of RBI dated 01.07.2016 being violative of Article 14 of the Constitution of India as it does not provide an opportunity of representation or hearing to an aggrieved party before declaring it as a fraud.”
Held: “That is to say, while a bank may most certainly report fraudulent transactions in an account to law enforcement agencies under the criminal law regime without issuing a show cause notice or hearing an affected party, but if an account is to be declared 'fraud' by an administrative decision in the framework of civil law, such action it appears on first principles, cannot be taken without giving to the affected party an opportunity of hearing to show cause against it.”