HDFC Bank says it has commenced legal action against Lilavati Trust over loan default issue

By | June 12, 2025
Lilavati Trust involved in HDFC Bank legal case

Mumbai, June 12, 2025 — HDFC Bank has started legal proceedings against Lilavati Kirtilal Mehta Medical Trust (LKMM Trust), claiming recovery of a loan from the 1990s. The matter has now snowballed into a public controversy, with both sides accusing each other of wrongdoing.

A Dispute That Began Decades Ago

According to HDFC Bank, the issue dates back to 1995. At the time, it granted a loan to Splendour Gems, a company tied to the Mehta family. The bank says the company defaulted by 2001. A Debt Recovery Tribunal issued a recovery certificate in 2004. However, the dues still remain unpaid.

As of May 31, 2025, the bank claims the amount due has grown to ₹65.22 crore, including interest. HDFC Bank insists it has followed the legal process and is now exercising its right to recover the money through the courts.

Lilavati Trust Says There Was No Loan

The Lilavati Trust, which manages one of Mumbai’s best-known hospitals, denies any connection to the loan. It says the Trust never borrowed money from HDFC Bank. In fact, the Trust claims the bank has failed to show any loan agreement or account ledger in court.

It also questioned inconsistencies in the bank’s statements. At different points, HDFC Bank has referred to loan figures of ₹4.8 crore, ₹450 crore, and ₹65.22 crore. The Trust argues this raises serious doubts about the bank’s claims.

Trust Alleges Bribery, Targets Bank CEO

The controversy intensified on June 8, 2025. On that day, Lilavati Trust filed an FIR accusing HDFC Bank’s Managing Director and CEO, Sashidhar Jagdishan, of accepting a ₹2.05 crore bribe. The Trust alleges the payment was made to harass a trustee’s family member and push false legal pressure.

This marked a major turn in the case. The allegations not only attack the bank’s recovery efforts but also question the conduct of its top executive.

HDFC Bank Calls Allegations Malicious

In response, HDFC Bank dismissed the charges. The bank said the Trust’s claims were false, misleading, and aimed at distracting attention. It also accused the Trust of trying to damage reputations instead of addressing the actual dues.

In a regulatory filing dated June 11, the bank said the timing of the FIR exposed the Trust’s “devious intent.” It claimed the Trust was using legal threats to derail a legitimate recovery process. HDFC Bank added it would take all legal steps to defend its staff and reputation.

Will Hospital Services Be Affected?

Many people have raised concerns about how this fight might affect Lilavati Hospital. The hospital plays a key role in Mumbai’s healthcare system. Patients and staff worry that the case could disrupt operations.

However, experts say the hospital is unlikely to face immediate issues. Legal analyst Ashok Bhatia explains, “Unless a court freezes the Trust’s assets, the hospital should continue to run normally.”

Legal Experts Warn of a Complex Case

Lawyers say this case is both legally tricky and sensitive. It involves old loans, disputed evidence, and serious criminal charges. Courts will need to examine not only financial records but also the motives behind the allegations.

Advocate Renu Desai, who handles financial disputes, notes, “Old debt cases often rely on proper documentation. If HDFC Bank cannot produce clear records, it may face legal challenges. At the same time, if the FIR was filed just to block recovery, the Trust could be sued for defamation.”

Bigger Picture: What It Means for the Banking Sector

The dispute comes at a time when banks in India are under pressure. They face scrutiny over bad loans, write-offs, and corporate governance. HDFC Bank, known for being cautious and reliable, risks losing some of its reputation if the case goes against it.

On the flip side, if the Trust’s claims are proved false, this could set a precedent. Banks may take a firmer stand in loan recovery cases and push back harder against false allegations.

What to Expect Next?

Here’s what could happen in the coming weeks:

  • HDFC Bank may be asked to provide detailed loan records.
  • The Trust’s bribery claims could be investigated.
  • Either side may face defamation charges if false claims are proven.
  • A settlement might be possible to avoid a long court battle.

Conclusion

What began as a financial recovery case has now turned into a high-profile legal drama. The outcome could impact not just the parties involved but also how similar disputes are handled in the future. With serious claims on both sides, all eyes are now on the courts to deliver clarity and justice.