Top court seeks accountability as investigative agencies are asked to disclose progress in sealed reports
Bench
Chief Justice of India Surya Kant and Justice Joymalya Bagchi
Background of the Case
The Supreme Court’s latest action stems from a Public Interest Litigation (PIL) filed by former Union Secretary E.A.S. Sarma, seeking a court-monitored investigation into alleged large-scale banking and corporate fraud involving Anil Ambani and the Anil Dhirubhai Ambani Group (ADAG).
The PIL claims that banks extended loans to companies associated with the ADAG and that funds have been systematically siphoned off, potentially amounting to ₹1.5 lakh crore or more. It alleges institutional failures, diversion of public funds, and financial misreporting across multiple corporate entities linked to the group.
The dispute has roots in multiple probes and actions over the past year — including FIRs registered by the Central Bureau of Investigation (CBI) based on audit reports from public sector banks, and ongoing investigations by the Enforcement Directorate (ED) under anti-money laundering statutes. In some related developments, banks like State Bank of India (SBI) classified accounts of group companies as fraud, which has been contested and litigated in other courts.
What the Supreme Court Ordered
On January 23, 2026, the Supreme Court took a significant procedural step by asking both the CBI and the ED to submit sealed status reports detailing the progress of their investigations into the alleged fraud. The court has also issued fresh notices to Anil Ambani and the ADAG entities to appear and respond to the PIL allegations.
The sealed reports order is notable because it allows the investigative agencies to share confidential updates directly with the judges without immediately disclosing all details publicly. The Supreme Court has given a 10-day deadline for the agencies to file these reports.
The bench has also emphasised that the respondents must participate in the proceedings — noting earlier attempts to avoid appearance despite having been served.
Key Issues at the Heart of the Dispute
• Alleged Large-Scale Fraud: The PIL claims that loans extended by multiple public sector banks to group firms were not just mismanaged but were subject to systematic diversion or misuse of funds, raising questions of fraud and complicity across a web of transactions.
• Institutional Accountability: One of the core contentions is whether regulatory banks and investigative agencies properly pursued accountability for massive defaults and loan write-offs, now alleged to be linked with fraudulent practices.
• Sealed Reports: By directing CBI and ED to file their updates under sealed cover, the Court intends to balance the need for confidentiality in sensitive investigations with its own supervisory role.
• Legal Representation: The Court has stressed that all parties, including Anil Ambani and ADAG companies, must appear and file their counter affidavits if any, ensuring fairness in the process.
Why This Matters
This case touches on some of the most consequential issues in Indian corporate regulation: the integrity of banking loans and lending practices, the effectiveness of financial forensic audits, and the judiciary’s role in ensuring thorough, transparent investigations into alleged white-collar crime.
It also highlights the interplay between investigative agencies and the courts — particularly in high-profile corporate fraud allegations involving large sums and influential business groups.
As the matter returns to the Supreme Court after the submission of sealed reports, it is expected to shape ongoing debates over corporate governance, financial accountability, and judicial oversight in India’s legal system.