The Supreme Court on Friday refused to pass any order for the arrest of industrialist Anil Ambani in connection with the ongoing probe into the alleged bank fraud and diversion of funds involving Reliance Communications and its group entities.
The Bench of Chief Justice of India (CJI) Surya Kant and Justice Joymalya Bagchi, while hearing 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, observed that criminal proceedings could not be converted into instruments of public spectacle or media sensationalism and must remain within the investigative domain of statutory agencies.
Custodial arrest could not be judicially directed unless the investigating agency itself considered such action necessary for the purposes of investigation, custodial interrogation or recovery of evidence, it pointed out, adding that investigative discretion ordinarily lies with the Directorate of Enforcement (ED) and the Central Bureau of Investigation (CBI).
As per the case, Reliance Communications and its subsidiaries, Reliance Infratel and Reliance Telecom, obtained loans worth approximately Rs 31,580 crore between 2013 and 2017 from a consortium of lenders led by State Bank of India (SBI). The petition alleged large-scale siphoning and diversion of loan funds through related-party transactions, circular routing of money, evergreening of debt facilities and deployment of borrowed funds into unrelated financial instruments and liabilities.
The petitioner had earlier alleged institutional failure and regulatory inaction despite forensic audit findings purportedly disclosing serious financial misconduct. In February 2026, the Supreme Court had directed the constitution of a Special Investigation Team (SIT) by ED for a coordinated investigation into the allegations.
During the current proceedings, sealed status reports concerning the progress of the investigation were submitted before the Court by the CBI and the ED.
Senior Advocate Prashant Bhushan, appearing for the petitioner, submitted that chargesheets had already been filed naming Anil Ambani and his son Anmol Ambani. It was argued that the prosecution material itself allegedly disclosed diversion of funds and acquisition of luxury assets using siphoned money, yet no coercive action had been initiated against the principal accused persons.
The petitioner further alleged selective investigation and contended that despite describing Anil Ambani as the central figure in the alleged financial fraud, the investigating agencies were refraining from effecting his arrest while proceeding against other accused individuals.
Appearing for the Union authorities, Solicitor General Tushar Mehta submitted that the investigation was still in progress and assured the Court that the agencies were proceeding strictly in accordance with law.
The Bench, however, referred to earlier Supreme Court precedents, including Satender Kumar Antil v. CBI and Pankaj Bansal v. Union of India, reiterating that unnecessary arrests should be avoided in economic offences involving documentary evidence unless there is material indicating tampering of evidence, intimidation of witnesses or obstruction of investigation. The Court observed that custodial interrogation was necessary only in exceptional circumstances and that constitutional courts could not simultaneously strengthen personal liberty jurisprudence while mechanically directing arrests.
Senior Advocate Kapil Sibal, appearing for Anil Ambani, questioned how copies of the charge sheet had reached the petitioner even before cognisance had been formally taken by the competent court. He argued that the proceedings appeared primarily aimed at securing Ambani’s arrest rather than ensuring a fair, impartial and legally sustainable investigation.
Senior Advocate Shyam Divan, appearing for group companies including Reliance Infrastructure and Reliance Power, highlighted the commercial implications arising from provisional attachment orders and coercive proceedings. It was submitted that attachment of strategic utility assets and shareholdings in electricity distribution and metro infrastructure companies could adversely affect public utility operations, financing arrangements, liquidity management and the interests of thousands of shareholders.
The Apex Court observed that court-monitored investigations could sometimes result in severe collateral consequences and reputational damage even before the determination of criminal liability. Referring to the continuing mandamus jurisprudence evolved in Vineet Narain v. Union of India, the Bench noted that while judicial monitoring remained an important constitutional mechanism to ensure accountability, courts must exercise institutional restraint and avoid excessive interference in investigative functions.
After hearing the parties, the Court declined to issue any direction for the arrest of Anil Ambani and adjourned the matter to July for further proceedings.
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