Canara Bank's Decision Reversed

The Canara Bank has officially withdrawn its order that classified the loan account of a firm linked to industrialist Anil Ambani as 'fraudulent', as informed to the Bombay High Court on Thursday.

Court's Response

Following the bank's disclosure, a bench of Justices Revati Mohite Dere and Neela Gokhale disposed of the petition filed by Ambani, stating that nothing survives in it. The bench also directed that the withdrawal order be communicated to the Reserve Bank of India.

Background of the Case

The contentious loan account pertains to Ambani's firm, Reliance Communications, currently undergoing insolvency proceedings. The bank had initially classified the account as 'fraud' on November 8, 2024, citing reasons such as the alleged routing of a Rs 1,050 crore loan extended in 2017 to a group company to pay liabilities to related parties.

Legal Challenges

Ambani challenged the classification, arguing the lack of a hearing before the decision was made. He also pointed out that the classification was communicated to him only after the High Court had stayed a similar classification in a related matter.