Supreme Court Defers Hearing in ₹73,000 Crore ADAG Banking Fraud Case

The Supreme Court of India has postponed the hearing of a Public Interest Litigation (PIL) alleging a banking fraud of potentially ₹73,000 crore involving companies linked to the Anil Dhirubhai Ambani Group (ADAG). A bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi deferred the proceedings to May 8, intensifying scrutiny on the role of India’s primary investigative agencies in recovering public funds.

Background and Context

The legal challenge stems from a petition filed by former bureaucrat E. A. S. Sarma, who alleges large-scale misuse of public funds and systemic financial irregularities. The petition claims that between 2013 and 2017, Reliance Communications and related entities secured loans exceeding ₹31,000 crore from a banking consortium led by the State Bank of India. It is alleged that these funds were diverted, with the aid of forged bank guarantees and fabricated financial documents, causing significant losses to the banking sector.

Key Figures and Entities

During the proceedings, advocate Prashant Bhushan, representing the petitioner, argued that the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) had failed to take substantive action against the alleged “kingpin” of the fraud. Senior advocate Kapil Sibal, representing Anil Ambani, requested additional time to make key submissions, asserting that crucial arguments had not yet been placed before any court. Solicitor General Tushar Mehta, representing the investigative agencies, submitted that detailed status reports had been filed but declined to comment on specific operational decisions.

Legal and Financial Mechanisms

The investigation focuses on complex financial mechanisms, including alleged loan settlements concluded at disproportionately low amounts. According to government submissions, a Special Investigation Team (SIT) has been constituted, comprising senior ED officials and financial experts from the banking sector. Authorities informed the court that assets worth approximately ₹15,000 crore have been attached so far and that four individuals have been arrested in connection with the case. The Supreme Court observed that the agencies are currently investigating multiple FIRs, with the CBI handling seven cases and the ED handling eight.

International Implications and Policy Response

While the case is domestic, it highlights broader vulnerabilities in regulatory frameworks governing large corporate lending and the enforcement of financial accountability. The Supreme Court has emphasized the necessity of forensic auditing of financial transactions and a detailed review of documents related to banking consortia. The bench stressed that investigating agencies must operate independently without external pressure and directed all financial institutions to extend full cooperation to ensure an effective investigation.

Sources

This report draws on court filings and proceedings at the Supreme Court of India, status reports from the Central Bureau of Investigation and Enforcement Directorate, and public records regarding the ADAG case.