Shares of Anil Ambani-led Reliance Power and Reliance Infrastructure are expected to be in focus when markets open on Monday after the Delhi High Court on Friday quashed Union Bank of India’s decision to classify the bank account of a company owned by industrialist Anil Ambani’s son, Jai Anmol Ambani, fraudulent.
Justice Jyoti Singh passed the order on a plea moved by Jai Ambani, who argued the bank took the decision without issuing any show cause notice or hearing him thereby, violating natural justice. Ambani said that the move went against the Supreme Court’s decision in State Bank of India v Rajesh Agarwal in which it was held that borrowers must be given prior notice and an opportunity to respond before declaring the account as fraud.
Senior Advocate Rajiv Nayar, appearing for Ambani, stated that Union Bank of India’s affidavit revealed the show cause notice was served on an address which the company had already vacated in September 2020. The Court opined that it would mean no show cause notice was served on Ambani before declaring his account as fraudulent.
However, it added that the court decision will not preclude the bank from issuing a fresh show cause notice to Ambani and proceeding in the matter. Justice Singh added that the bank must furnish all material and documents to Ambani with the fresh notice to enable him to file a response and once he replies, a fresh order can be passed.
The CBI has filed cases against Anil Ambani group companies on allegations of fraud amounting to nearly ₹14,853 crores. The agency’s case against Jai Anmol Ambani is that he cheated the Union Bank of India and caused the public sector bank a loss of nearly ₹228 crore.
According to reports, the CBI has said that Reliance Home Finance Ltd (RHFL), where Jai Anmol Ambani was a director, borrowed substantial funds but failed to meet repayment obligations. A forensic audit allegedly found that loan proceeds were diverted and misused rather than used for their sanctioned purposes, resulting in the account slipping into non-performing asset (NPA) status. Union Bank claimed a wrongful loss of approximately ₹228.06 crore and after classifying the account as fraudulent, lodged a complaint with the CBI alleging criminal conspiracy, cheating and misconduct.
Shares of Reliance Infrastructure on Friday saw strong buying interest, touching the upper circuit limit of 5%. The stock jumped to an intraday high of Rs 173.20, marking the highest level for the day, and closed near Rs 173, registering a gain of 4.87% from its previous close.With this, the stock posted gains for six consecutive sessions and delivered a cumulative return of 32.92%. This reflected robust trading activity and positive market sentiment.
Reliance Power also witnessed a rise for the fourth straight day, posting a cumulative return of 11.8% during the period. The stock opened at Rs 38 and climbed to an intraday high of Rs 38.65. It was last traded at Rs 38.55, up nearly 2% from the previous session. However, Reliance Power Ltd is a constituent of the Nifty Energy Index, which has declined 4.37% over the past one month. The stocks were earlier impacted by legal developments after the Central Bureau of Investigation (CBI) registered a case against Jai Anmol Ambani. The stocks later recovered after the Delhi High Court issued a notice to Union Bank of India, questioning whether a proper show-cause notice had been served before declaring Jai Anmol Ambani’s bank account as “fraud.”