NEW DELHI: The Delhi High Court on Monday questioned the Union Bank of India for issuing a show cause notice to Reliance Housing Finance Limited (RHFL), a firm of Anil Ambani’s son Jai Anmol Ambani over alleged fraudulent activity in the account of the company, pointing out that the company had undergone insolvency proceedings and that the resolution plan was approved by all creditors, including UBI.
“Notice has to make sense, no. Why are you issuing a show cause notice once the plan has been approved, and where have you said that this was wrongly approved or that there was a fallacy in the resolution plan?” justice Jasmeet Singh told the bank’s lawyer.
However, he refused to immediately stay the proceedings initiated by Union Bank of India to classify the bank account as fraudulent and directed Ambani to submit his reply to the bank’s show-cause notice within 10 days and to appear for a personal hearing before the bank on January 30. It further instructed the bank to pass a reasoned (speaking) order and place it before the court on the next date of hearing, February 27.
This was after Ambani’s lawyer Rajiv Nayyar urged the court to stay the proceedings, asserting that the show cause was fundamentally flawed since the resolution plan of Reliance Home Finance Limited had been approved by the Committee of Creditors, the lender banks, and subsequently by the Supreme Court of India, leaving no scope for allegations of fraud.
Singh further argued that, even assuming a worst-case scenario, the Union Bank of India had owned the relevant information since 2020, yet issued the show-cause notice after a delay of five years.
The bank’s lawyer opposed the maintainability of the petition, asserting that it had only issued a show cause notice and was yet to take a call.
