The Bombay High Court has quashed a bribery case and a related First Information Report (FIR) against Sashidhar Jagdishan, the Managing Director and CEO of HDFC Bank. The court characterized the complaint as a “counterblast” to the bank’s ongoing efforts to recover more than Rs 65 crore in outstanding dues from a company linked to the Lilavati Kirtilal Mehta Medical Trust’s founding family.
The legal dispute originated from recovery proceedings initiated by HDFC Bank against Splendour Gems Ltd, a company managed by the Mehta family, which owed the bank Rs 65.22 crore. Following these recovery efforts, the Lilavati Kirtilal Mehta Medical Trust—which operates the Lilavati Hospital in Bandra—filed a complaint through its representative, Prashant Mehta.
The Trust alleged that HDFC Bank CEO Sashidhar Jagdishan had accepted a bribe of Rs 2.05 crore from Chetan Mehta, one of the trustees. The complainant claimed that a diary discovered during recovery proceedings suggested these payments were made for financial advice and to assist Chetan Mehta in maintaining control over the Trust’s governance. Consequently, a magistrate’s court in May 2025 ordered a police probe, leading to an FIR being registered on May 31, 2025, under sections 406, 409, and 420 of the Indian Penal Code.
Sashidhar Jagdishan moved the High Court seeking to quash the FIR, arguing that the criminal case was a direct fallout of the bank’s legitimate enforcement proceedings against the family of the Trust’s founders for a default exceeding Rs 65 crore.
The Trust, conversely, alleged that Chetan Mehta and others had illegally seized control of the institution and used its funds for personal litigation. They even claimed that the Trust’s founder, Kishore Mehta, died in 2024 due to the “pressure” exerted by the bank officials.
A division bench of Justices M S Karnik and N R Borkar scrutinized the materials and found no justification for a criminal investigation. The court observed that the complaint was deeply rooted in the “serious acrimony, distrust and strained relations” between the past and present trustees of the medical trust.
Regarding the bank’s role, the bench noted:
“In our view, the complaint is nothing but a counterblast to the recovery proceedings initiated, and the materials on record do not at all justify an investigation into the claim made by the complainant.”
The court emphasized that financial institutions are legally bound to initiate recovery proceedings for loan amounts. It further dismissed the allegation that bank officials were responsible for the death of Kishore Mehta, stating that officials cannot be blamed for such occurrences during the performance of their duties.
The bench concluded that allowing the FIR to continue would be an “abuse of the process of court,” as the complaint lacked bona fide intent and was instead a byproduct of the internal power struggle within the Trust that had spilled over to target the bank’s leadership.
The High Court allowed Jagdishan’s plea, quashing the FIR and setting aside the magistrate court’s order for a police investigation. The court noted that HDFC Bank is still pursuing recovery proceedings before the Debt Recovery Tribunal (DRT) for substantial outstanding dues.
