PIL in Supreme Court Seeks Probe into Alleged ₹900-Crore Banking Fraud Involving ARCs

A Public Interest Litigation (PIL) has been filed in the Supreme Court seeking a court-monitored investigation into alleged large-scale banking fraud involving asset reconstruction companies (ARCs), public sector banks, and a Noida-based infrastructure firm.

The plea seeks the constitution of a judicial commission or expert committee comprising officials from the Reserve Bank of India, Securities and Exchange Board of India, Serious Fraud Investigation Office, Enforcement Directorate, and Central Bureau of Investigation. Alternatively, it seeks a probe by ED, SFIO, and CBI into suspicious transactions flagged in a forensic audit.

Filed by Muzaffarnagar-based petitioner Prateeksha and others through advocates Ashwini Kumar Upadhyay and Ashwani Kumar Dubey , the plea alleges that the infrastructure firm availed loans of around ₹912 crore between 2012 and 2015 from a consortium of seven banks led by the State Bank of India.

It further claims that a 2018 Ernst & Young forensic audit found that over ₹902 crore was allegedly diverted through shell companies, fictitious vendors, and undisclosed bank accounts , suggesting large-scale financial misappropriation and routing of funds to obscure their end use.

The petition raises concerns over the role of Asset Reconstruction Companies , arguing that gaps in oversight may have enabled the diversion and masking of funds through complex financial structures.

It describes the matter as potentially one of the largest banking frauds linked to ARCs , alleging systemic failure in monitoring stressed asset resolution and recovery mechanisms.

The Supreme Court is yet to take a decision on the plea. If admitted, the case could prompt wider scrutiny of banking regulation, ARC functioning, and inter-agency coordination in tackling financial frauds.