Why Is HDFC Bank’s CEO Facing an FIR? The Lilavati Hospital Case Explained

HDFC Bank’s Managing Director and CEO Sashidhar Jagdishan has approached the Supreme Court to quash an FIR accusing him of accepting over Rs 2 crore in bribes to help a faction retain control over Mumbai’s Lilavati Hospital Trust. The legal fight has quickly become one of India’s most high-profile corporate-law-and-trust disputes, with accusations of bribery, cheating, breach of trust, and claims of harassment of defaulters.
Here is a detailed breakdown of where the legal battle stands.

What Are the Allegations Against Sashidhar Jagdishan?
The Lilavati Kirtilal Mehta Medical Trust, which runs Mumbai’s well-known Lilavati Hospital, alleges that Jagdishan accepted a bribe of Rs 2.05 crore in 2022. The trust claims the payment was made by then-trustee Chetan Mehta and associates to help them retain illegal control over the trust's governance. The trust says Jagdishan used his position at HDFC Bank to harass the founding family (the Mehtas) through aggressive loan recovery to pressure them. The allegations are based on a diary seized during internal investigations, which purportedly records the payment schedule between March and June 2022.

How Did the Police Case Start?
In April 2024, the trust filed an application before a judicial magistrate in Mumbai seeking an investigation. On May 29, the magistrate ordered Bandra Police to register an FIR under IPC sections 406 (criminal breach of trust), 409, and 420 (cheating), citing the “high amount involved” and the need for investigation. Bandra Police filed the FIR against Jagdishan, Chetan Mehta, and six others on May 31.

What Other FIRs Have Been Filed?
A separate FIR was filed against Chetan Mehta, Phoenix ARC Pvt. Ltd., and others for allegedly embezzling Rs 2.25 crore of trust funds. The Lilavati Trust alleges wider fraud and misuse of trust assets by former trustees and companies.

What Is the Lilavati Trust’s Side of the Story?
The trust is managed by the Mehta family. It claims Jagdishan was paid to help Chetan Mehta and allies keep control even after large loan defaults. It has also filed civil and criminal defamation suits against HDFC Bank, Jagdishan, and its spokesperson, accusing them of a “deliberate smear campaign.” The trust is asking the High Court to transfer the probe to the CBI for an independent investigation.

What Are Jagdishan and HDFC Bank’s Defense?
Jagdishan says the FIR is retaliation because HDFC Bank began recovery proceedings against Splendour Gems Ltd. (earlier Beautiful Diamonds Ltd.), a company owned by the Mehta family. He says the loan default stood at Rs 65.22 crore as of May 31, 2024. The bank says the trust’s allegations are based only on Xerox copies of selected diary entries with no supporting witnesses or evidence. HDFC Bank alleges “unscrupulous persons” are abusing the legal system to avoid repaying old loans dating back to 1995.

What’s Happening in Court Now?
Jagdishan first tried to get the FIR quashed in Bombay High Court. Three separate judges recused themselves. The matter is now before the Supreme Court, where his lawyers are seeking an urgent hearing to quash the FIR and stop any coercive action. Separately, the Lilavati Trust’s defamation suit and CBI transfer plea are also pending in High Court.

Why Is This Case Significant?
It pits India’s largest private-sector bank against one of Mumbai’s best-known hospital trusts. Raises questions about banking ethics, governance of public trusts, and alleged misuse of legal proceedings on both sides. Could set a precedent for corporate liability, trust governance disputes, and the limits of bank recovery practices.

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