Mumbai: The Bombay High Court on Friday dismissed a petition filed by industrialist Anil Ambani challenging the State Bank of India's (SBI) decision classifying his and Reliance Communications' accounts as fraud.

A bench of Justices Revati Mohite Dere and Neela Gokhale said there was no merit in the plea. A detailed copy of the judgement was not available immediately.

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The SBI had last year classified the accounts as fraud, alleging misappropriation of funds by entering into transactions that violated the terms of loans extended by it.

Ambani moved the HC, arguing that the bank had not followed the principles of natural justice as it did not grant him a hearing.

Certain documents, based on which the classification orders were passed, were not provided to him initially, and furnished only after six months, the petition claimed.

The bank this year lodged a complaint with the Central Bureau of Investigation (CBI), which searched premises linked to Reliance Communications and Ambani's residence.

The CBI said it had registered a complaint after the State Bank of India claimed a loss of ₹2,929.05 crore resulting from alleged misappropriation by Reliance Communications and Anil Ambani.

Earlier this month, Bank of Baroda, in an exchange filing, declared that the loan accounts of Reliance Communications Ltd (RCom) and its erstwhile director Anil Ambani had been categorised as “fraud”.

This classification pertained to loans taken before RCom entered the corporate insolvency resolution process (CIRP), the exchange filing said.

This development marked a crucial turn in the ongoing financial saga surrounding the once-prominent telecom company and its erstwhile director.

Rcom, which underwent the CIRP under the Insolvency and Bankruptcy Code (IBC), 2016, said that the loans in question are related to the period before its insolvency proceedings began. The company asserted that these loans must be resolved as part of a resolution plan or through liquidation under the IBC.

RCom is presently under the control of a resolution professional, Anish Niranjan Nanavaty. Anil Ambani is no longer a director of the company.

(with inputs from PTI and IANS)