The Bombay High Court has delivered a significant ruling, quashing a First Information Report (FIR) filed against HDFC Bank's Managing Director and CEO, Sashidhar Jagdishan, in connection with the Lilavati Trust case. The court, in its 53-page order issued on May 6, 2026, also set aside a magistrate's directive from May 29, 2025, which had ordered a police investigation into the matter.
Background of the Lilavati Trust Allegations
The complaint was lodged by Prashant Kishore Mehta, acting as a trustee for the Lilavati Kirtilal Mehta Medical Trust, which operates the prominent Lilavati Hospital in Mumbai. The FIR, registered at Bandra police station on May 31, 2025, accused Jagdishan of colluding with former trustees of the trust. It alleged that he received cash payments totaling approximately Rs 2.05 crore, purportedly on the instructions of Chetan Mehta. These allegations were based on entries found in a photocopied cash diary, discovered after new trustees assumed control of the trust in late 2023.
The complaint further claimed that in 2006, Chetan Mehta and others fraudulently gained control of the trust, subsequently misusing its funds for personal benefit and litigation, in alleged collusion with other accused parties. The FIR had been registered under Sections 406 (criminal breach of trust), 409 (criminal breach of trust by public servant, or by banker, merchant or agent), and 420 (cheating) of the Indian Penal Code.
High Court's Ruling and Reasoning
A division bench comprising Justices MS Karnik and NR Borkar concluded that the complaint and the subsequent FIR did not warrant an investigation. The court asserted that the complaint was a "counterblast" to ongoing recovery proceedings initiated by HDFC Bank against the complainant's family. These proceedings involved alleged repayment defaults exceeding Rs 65 crore, and had already reached finality through orders from the Debt Recovery Tribunal and the High Court itself.
Senior Advocate Amit Desai, along with Sandeep Singhi of Singhi & Co, represented Jagdishan, arguing that the FIR was a direct consequence of these long-running recovery and enforcement actions. The High Court concurred, stating that the lower court's order constituted a "gross abuse of the criminal process" and was based on a civil matter.
The bench found that the complaint failed to disclose the essential elements required to establish offences of criminal breach of trust or cheating. It characterized the case as one driven by a "personal vendetta writ large on the face of recovery proceedings," thereby justifying early intervention. The court emphasized that allowing the investigation to continue would amount to an abuse of the legal process.
Conclusion of a Lengthy Dispute
With the FIR quashed and the magistrate's order set aside, the Bombay High Court's decision brings an end to a protracted legal battle that had been examined across multiple forums, including repeated challenges before the Supreme Court. The ruling clears HDFC Bank CEO Sashidhar Jagdishan and also quashed related FIRs against Phoenix ARC Private Limited and its directors.