Supreme Court directs ED to form SIT to probe alleged RCom bank fraud

The Supreme Court asked the Enforcement Directorate to set up a senior-level SIT to take forward the probe into alleged large-scale bank fraud involving RCOM and Anil Ambani

The Supreme Court on Wednesday directed the Enforcement Directorate (ED) to constitute a senior-level Special Investigation Team (SIT) to carry forward the probe into alleged large-scale bank fraud involving Reliance Communications (RCOM), its group companies and industrialist Anil Ambani.

 

A Bench led by Chief Justice of India Surya Kant, along with Justices Joymalya Bagchi and Vipul Pancholi, said the investigation must be pursued decisively and taken to its logical conclusion without disruption.

 

Advising the ED to form a dedicated team of experienced officers, the Court said all lawful measures must be adopted to ensure an effective and fair probe.

 

 

During the hearing, the Court also recorded an undertaking on behalf of Ambani that he would not leave the country without prior permission.

 

Senior advocate Mukul Rohatgi, appearing for Ambani, assured the Bench that his client was fully cooperating with the investigation and remained in India.

 

The assurance came amid concerns that Ambani could travel abroad before completion of the probe.

 

The undertaking was questioned by Solicitor General Tushar Mehta, who referred to past instances where similar assurances had not prevented accused persons from leaving the country.

 

Advocate Prashant Bhushan, appearing for the petitioner, also cautioned that such statements lose significance once an accused travels overseas.

 

After hearing all sides, the Court recorded both the government’s assurance that preventive steps would be taken and Ambani’s undertaking not to travel without leave of court.

 

In a significant additional direction, the Bench asked the Central Bureau of Investigation (CBI) to examine whether bank officials were complicit in the alleged fraud. It said the agency must investigate whether loans were sanctioned or funds released with the involvement, collusion or conspiracy of bank officers, and directed that all lawful steps be taken to probe any such nexus.

 

The Court expressed concern over the pace of the investigation so far, noting unexplained delays, particularly on the part of the ED.

 

Emphasising that the probes must be conducted promptly, independently and fairly, the Bench directed the ED and the CBI to file status reports within four weeks.

 

It also indicated that, based on the CBI’s own status report, the FIR was initially registered only on a complaint by the State Bank of India (SBI) and later expanded to include other lenders, an approach the Court said appeared procedurally questionable.

 

The case arises from a petition filed by former Union government secretary E A S Sarma, who has sought a court-monitored investigation, alleging that the existing probes are inadequate.

 

The petition states that RCOM and its subsidiaries received loans amounting to Rs 31,580 crore between 2013 and 2017 from a consortium of banks led by SBI. It relies on a forensic audit commissioned by SBI, which allegedly found large-scale diversion of funds through repayments of unrelated loans, transfers to connected entities and circular transactions to mask evergreening.

 

The plea also questions SBI’s nearly five-year delay in lodging a complaint after receiving the audit report, alleging possible institutional complicity and arguing that only sustained judicial oversight can ensure a comprehensive probe into the alleged fraud.