Supreme Court Criticizes Probe Agencies for Reluctance in ADAG Group Loan Fraud Investigation
The Supreme Court of India on Monday expressed strong criticism over what it described as a perceptible reluctance among investigating agencies to proceed against companies led by industrialist Anil Ambani under the ADAG group. These entities are accused of siphoning approximately Rs 40,000 crore from bank loans through fraudulent activities.
Court Directs Expedited and Coordinated Inquiry
A bench comprising Chief Justice Surya Kant, Justice Joymalya Bagchi, and Justice Vipul M. Pancholi directed the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) to carry out an expeditious and coordinated inquiry against the ADAG entities, their directors, and officials. The court emphasized that the investigation must be transparent, fair, and prompt to inspire confidence among all stakeholders and the public.
"The conduct of the investigating agencies has reflected a degree of reluctance. The investigation carried out by the probe agencies must be transparent, fair and prompt to inspire confidence not only in the court but also among all stakeholders and the public," the bench stated.
Background of the Case and Agency Actions
The irregularities in the Anil Ambani-led ADAG group loan fraud probe were flagged much earlier by the Securities and Exchange Board of India (SEBI). However, the CBI's FIR in August 2025 dealt with only a small part of the alleged fraud. Solicitor General Tushar Mehta, appearing for the CBI and ED, assured the court that he would personally convey the court's views to the agencies in a "much harsher" manner.
Mehta informed the court that the ED has constituted a Special Investigation Team (SIT) as directed by the Supreme Court. The CBI has so far registered eight separate cases involving the alleged siphoning off of nearly Rs 41,000 crore from bank loans. Four top officials of the ADAG group have been arrested in connection with these cases.
Investigative Challenges and Measures
The CBI is taking help from financial experts to unravel the complex routing and re-routing of money involved in the fraud. The ED has written letters to banks and financial institutions, requesting prompt furnishing of information related to the sanctioning of loans and the due diligence followed prior to disbursement. The ED has also urged these institutions to act against errant officials under banking laws and regulations.
Upon Mehta's request, the bench directed all financial and other institutions to promptly furnish the information required by the probe agencies. The court emphasized that "apart from the ADAG group and its officials, those involved in the irregular sanction of loans and playing with public money should also be proceeded against."
Petition Details and Allegations
The Public Interest Litigation (PIL) was filed by former bureaucrat E.A.S. Sarma through advocate Pranav Sachdeva. It alleges that three ADAG companies – Reliance Communications (RCOM), Reliance Infratel (RITL), and Reliance Telecom (RTL) – cumulatively received loans totaling Rs 31,850 crore from a consortium of public sector banks led by the State Bank of India (SBI) between 2013 and 2017.
The petition claims that various documents reveal the alleged involvement of ADAG companies in:
- Large-scale diversion of funds
- Round-tripping of money
- Misuse of external commercial borrowings
- Fabrication of accounting entries
- Operation of shell entities
- Complete disregard for public money
Advocate Prashant Bhushan, representing the PIL petitioner, pointed out that SEBI had provided a detailed report about the financial fraud indulged in by ADAG group entities, yet the probe agencies did not take significant action until the Supreme Court issued notices to them.
Settlement Discussions and Legal Proceedings
For Anil Ambani, who has already given an undertaking to the court not to leave India without prior permission from the Supreme Court, senior advocate Mukul Rohatgi stated that the ADAG group is ready to discuss settlement of dues with banks and financial institutions. However, he noted that no one is coming forward due to the pendency of the PIL.
Mehta clarified that while settlement of dues could absolve the ADAG group of civil liabilities, the criminal acts require thorough investigation and must be taken to their logical conclusion. The bench brushed aside Rohatgi's request for directions to banks to discuss settlement of dues with the ADAG group, emphasizing the need for criminal accountability.
Next Steps and Court Directives
The Supreme Court has asked the CBI and ED to file fresh status reports on the ADAG group case within four weeks. This directive aims to ensure ongoing monitoring and accountability in the investigation process, reinforcing the court's commitment to addressing financial fraud and protecting public funds.
