HDFC Bank's Statement Not Prima Facie Defamatory Against Lilavati Trust: Bombay High Court Imposes Rs 5 Lakh Cost On Lilavati Trust

The Bombay High Court on Tuesday (June 9) refused to pass an interim injunction against HDFC Bank and it's CEO Sashidhar Jagdishan to restrain them from making any statements against the Lilavati Kirtilal Mehta Trust or its Trustees Prashant or Charu Mehta.The court has also imposed a hefty cost of Rs 5 lakh on the Trust be paid to HDFC Bank within six weeks. Single-judge Justice Somasekhar Sundaresan said the statements made by the HDFC Bank in a Press Release could not be said to be defamatory or retaliatory defamatory as it were made only after the Trustees opened a "spree" of filing multiple frivolous litigation only to lash out at the Bank.The judge noted that in June 2025, the Trust organised a Press Conference and made serious and scandalous allegations against the Bank and its CEO Jagdishan and then subsequently wrote a letter, making the same allegations, to the RBI, SEBI and even the Board of Directors of HDFC. However, the letter was later 'leaked' to the media and it is when the media confronted the HDFC about the letters and sought to know its side, that the bank issued a Press Release, clarifying its position in the matter. "What is apparent is that prima facie, it is not at all reasonable to expect HDFC Bank to release a letter containing serious allegations against it, to the media. Prima facie, the only person to benefit from the leakage of Lilavati Trust's letter to HDFC Bank would be Prashant. Even if one were to presume that the leakage was a bona fide sharing of the letter by someone despite Prashant being against such leakage, the media having called for an explanation, it is only reasonable and logical to expect HDFC Bank to explain its position. When a letter containing serious allegations against HDFC Bank was imminently to be published in the media, and an opportunity to get its side of the story was presented, the intention behind the response by HDFC cannot be faulted. In my view, the need to respond is clearly bona fide and it could not be faulted for having made the statement," Justice Sundaresan held. The judge noted that the bank in its Press Release had clarified that it had initiated recovery proceedings against the Trust in 2004 and the same are yet to be complete even after 20 years and that the Mehta family owed certain amounts to the bank. Stating the same to explain the motivations behind the assault on HDFC Bank and Jagdishan, among others, through the leaked letter from Lilavati Trust to the HDFC Bank's board of directors and the financial sector regulators, is a bona fide exercise and is also the responsibility of a listed bank to explain its position, the judge said."Banks have a far higher intensity of promise and assurance owed to not just its stakeholders but also the society at large. If a bank is pursuing recovery attempts and has been frustrated from success for 20 years, and in the course of the conflict, serious allegations are levelled against the bank, stating this element is not at all defamatory at least for this prima facie stage of assessment. Grave and irreparable harm would be occasioned to the Defendants if an intervention is made in favour of the Plaintiffs, who have an established track record of running a media campaign against HDFC Bank and its officials. Gagging HDFC Bank would expose them to the risk of being unable to respond to continued attacks by the Plaintiffs. Gagging both sides would be contrary to the constitutional default position of free speech that is truthful, because it would gag HDFC Bank through the backdoor with a token gagging of the Plaintiffs," Justice Sundaresan opined. Notably, the Trustees and HDFC Bank have locked horns in a legal spat after Prashant Mehta was made a party to recovery proceedings before the Debt Recovery Tribunal (DRT) initiated at the behest of the Bank. Prashant was made party post his father - Kishor Mehta's death.Justice Sundaresan noted that the Lilavati Trust, which runs the famous Lilavati Hospital in Mumbai, had organised Press Conferences, making allegations against HDFC Bank and it's higherups. The Trust, among several civil and criminal proceedings, had also filed a complaint before the Minority Commission alleging that it was due to the harassment by the Bank for recovery of loan amounts, their father Kishor, who belonged to the minority religion - Jainism, died."To my mind, allegations of culpable homicide against a bank and its officials by resourceful litigants who have indeed not paid a penny for 20 years and have not even made a deposit as directed by a Learned Division Bench of this Court is not just intimidatory but is also vexatious. A person against whom recovery certificates have been issued in accordance with law, invoking the jurisdiction of the Minorities Commission to claim persecution of a religious minority is also vexatious to my mind. Therefore, in my view, this element of the Subject Statements too does not call for issuance of any injunction, being factual in nature...

HDFC Bank's Statement Not Prima Facie Defamatory Against Lilavati Trust: Bombay High Court Imposes Rs 5 Lakh Cost On Lilavati Trust

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HDFC Bank's Statement Not Prima Facie Defamatory Against Lilavati Trust: Bombay High Court Imposes Rs 5 Lakh Cost On Lilavati Trust

Narsi Benwal

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Narsi Benwal

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