SC Refuses Plea Seeking Arrest of Anil Ambani in Reliance Fraud Probe

May 9, 2026 : The Supreme Court on Friday declined to direct the arrest of industrialist Anil Ambani in connection with the ongoing investigation into the alleged bank fraud and diversion of funds involving Reliance Communications and its group entities. A Bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi observed that criminal investigations could not be turned into instruments of media spectacle and that decisions relating to custodial arrest must remain within the domain of investigative agencies.

The Court noted that custodial arrest could only be justified where investigating authorities considered it necessary for interrogation, recovery of evidence or effective investigation. It emphasised that such discretion ordinarily rests with the Directorate of Enforcement (ED) and the Central Bureau of Investigation (CBI).

The matter arose from a petition filed by former Union Secretary EAS Sarma seeking a court-monitored probe into alleged financial irregularities, diversion of public funds and fraudulent transactions involving Reliance Group companies.

According to the petition, Reliance Communications and its subsidiaries, Reliance Infratel and Reliance Telecom, secured loans amounting to nearly Rs 31,580 crore between 2013 and 2017 from a consortium led by State Bank of India. The allegations include siphoning of funds through related-party transactions, circular routing of money, evergreening of loans and diversion of borrowed funds into unrelated financial instruments and liabilities.

The petitioner alleged regulatory inaction despite forensic audit findings pointing to serious financial misconduct. In February 2026, the Supreme Court had directed the constitution of a Special Investigation Team by the ED to conduct a coordinated probe.

During the hearing, Senior Advocate Prashant Bhushan, appearing for the petitioner, submitted that charge sheets had already been filed naming Anil Ambani and his son Anmol Ambani. He argued that the material collected during investigation disclosed diversion of funds and acquisition of luxury assets using siphoned money, yet no coercive action had been taken against the principal accused.

The petitioner further alleged selective investigation, contending that despite identifying Anil Ambani as the central figure in the alleged fraud, agencies had refrained from arresting him while proceeding against other accused persons.

Appearing for the Union authorities, Solicitor General Tushar Mehta informed the Court that the investigation remained ongoing and assured the Bench that agencies were acting strictly in accordance with law.

The Bench referred to earlier Supreme Court judgments, including Satender Kumar Antil v. CBI and Pankaj Bansal v. Union of India, reiterating that unnecessary arrests in economic offences involving documentary evidence should be avoided unless there is material suggesting tampering with evidence, intimidation of witnesses or obstruction of investigation.

Senior Advocate Kapil Sibal, appearing for Anil Ambani, questioned how copies of the charge sheet had reached the petitioner before cognisance was formally taken by the competent court. He argued that the proceedings appeared aimed more at securing Ambani’s arrest than ensuring a fair and impartial investigation.

Senior Advocate Shyam Divan, appearing for Reliance Infrastructure and Reliance Power, highlighted the commercial consequences of attachment orders and coercive proceedings, stating that attachment of strategic utility assets and shareholdings could adversely impact public utility operations, financing arrangements and shareholder interests.

The Supreme Court observed that court-monitored investigations could result in serious collateral and reputational consequences even before criminal liability is established. Referring to the principles laid down in Vineet Narain v. Union of India, the Bench said judicial monitoring remains an important constitutional mechanism but courts must exercise institutional restraint and avoid excessive interference in investigative functions.

The matter has now been adjourned to July for further hearing.