Delhi High Court Cancels Union Bank’s “Fraud” Tag on Ambani-Linked Company
The Delhi High Court has set aside Union Bank of India’s decision to label the bank account of a company linked to Jai Anmol Ambani as “fraud”.
The Court held that the bank failed to follow basic principles of natural justice. It noted that no proper show-cause notice was served on the company before declaring the account fraudulent, and no opportunity of hearing was given.
Justice Jyoti Singh observed that the notice was allegedly sent to an address that the company had already vacated in 2020. As a result, the Court concluded that the notice was never actually served.
The judgment relied on an earlier Supreme Court of India ruling, which clearly states that banks must give prior notice and a chance to respond before branding any account as fraud.
While cancelling the fraud classification, the High Court clarified that the bank is free to restart the process. However, it must issue a fresh notice, share all relevant documents, and give the company a fair chance to reply before taking any decision.
The case is connected to allegations against companies of the Anil Ambani group, where investigating agencies have claimed large-scale financial irregularities. These allegations will continue separately, and the High Court order does not affect those proceedings.
