SC issues notice to HDFC CEO on Lilavati Trust plea against HC quashing FIR against him

Mumbai: The Supreme Court on Friday issued notice to HDFC Bank CEO Sashidhar Jagdishan in a petition filed by Lilavati Trust against a recent Bombay high court order that quashed its FIR against him.

The Lilavati Kirtilal Mehta Medical Trust had last year through its trustee Prashant Mehta registered a first information report (FIR) against Jagdishan and others after the bank initiated recovery proceedings for Rs 65 crore in dues, alleging that Jagdishan had committed offences of cheating and criminal breach of trust. The HC had on May 5 granted relief to Jagdishan and three others who too had filed quashing petitions against similar allegations dubbing the FIR a ‘fallout’’ and a counterblast to recovery proceedings which had “personal vendetta writ large’’.

Against the HC judgment, the Lilavati Trust went to the top court with a special leave petition (SLP). On Friday, the SC bench of Justices MM Sundresh and NK Singh heard the matter and issued notice after hearing senior counsel Siddharth Luthra for the Trust. Luthra argued that police probe ought to go on in the FIR and that the HC interfered at a nascent stage of investigation, the SC issued notice and sought replies and rejoinders.

The HC division bench of Justices MS Karnik and NR Borkar had also dismissed the Trust’s plea to transfer the probe to Central Bureau of Investigation (CBI).

The Trust’s SLP raised “substantial questions concerning the permissible limits of judicial interference in ongoing criminal investigations involving allegations of large-scale financial irregularities, diversion of charitable trust funds, abuse of fiduciary position, and economic offences having wider public ramifications.’’

The SC said the matter would be next heard post its summer vacation.

The Trust’s case is that during 2006-2023, erstwhile illegal trustees, allegedly in collusion with Jagdishan siphoned and misappropriated charitable trust funds through illegal financial transactions. The hospital Trust said police had taken no action and registered the FIR only after a judicial magistrate directed its registration last May.

Jagdishan’s case was that the FIR was a gross abuse of the legal process and intended to harass him and tarnish the bank’s reputation. Senior counsel Mukul Rohatgi representing him opposed the SLP.

The SLP says that the HC had itself called fro investigation record in a sealed cover by its order neither discusses nor considered its content including documentary compilation witness statements, cash register entries, emails, reduced medical bills.

The SLP said legal issues of public importance which are being raised include whether the HC was justified to quash the FIR at nascent probe stage by “virtually conducting a mini-trial’’ at a threshold stage prior to completion of investigation.

The HC had acknowledged the probe was at a nascent stage but observed that evident attempt to derail legitimate debt recovery justified its intervention.