Mehta Family Files FIR Against HDFC Bank CEO Sashidhar Jagdishan Over Lilavati Trust Controversy

The Mehta family, prominent trustees of Mumbai’s renowned Lilavati Hospital, have filed a First Information Report (FIR) against HDFC Bank CEO Sashidhar Jagdishan and other bank officials. The complaint alleges financial mismanagement, breach of trust, and fraudulent transactions involving the hospital’s funds held with the bank.

This high-profile case has sent shockwaves through India’s banking and healthcare sectors. In this blog, we break down:
✔ What led to the FIR?
✔ Key allegations against HDFC Bank
✔ The Mehta family’s claims
✔ HDFC Bank’s response
✔ Legal and financial implications

Background: The Lilavati Hospital Trust Controversy

Lilavati Hospital, a premier healthcare institution in Mumbai, is managed by the Lilavati Kirtilal Mehta Medical Trust (LKMMT). The Mehta family has been embroiled in a long-standing legal battle over control of the trust, with factions led by Prabodh Mehta and his niece, Charu Mehta, accusing each other of mismanagement.

The Role of HDFC Bank

The trust holds significant deposits and investments with HDFC Bank.
The Mehta family alleges that the bank allowed unauthorized transactions without trustee approval.

Why Was an FIR Filed Against HDFC Bank CEO?

The FIR, filed at the Mumbai Economic Offences Wing (EOW), accuses Sashidhar Jagdishan and senior HDFC officials of:

1. Unauthorized Fund Transfers

The Mehtas claim that ₹300+ crore were moved without proper authorization.
Transactions allegedly bypassed mandatory trustee approvals.

2. Breach of Banking Protocols

The bank is accused of ignoring KYC norms and allowing suspicious transactions.
Some funds were reportedly diverted to private accounts linked to rival trustees.

3. Collusion with Opposing Trust Faction

The FIR suggests that HDFC Bank favored one group of trustees over another in internal disputes.

Mehta Family’s Legal Stand

Prabodh Mehta, representing the family, stated:
“HDFC Bank violated fiduciary duty by permitting illegal transactions. We demand a forensic audit and criminal action against those responsible.”

Key Demands in the FIR:

Freeze all disputed trust accounts
Investigate HDFC Bank’s role in fund diversion
Prosecute bank officials under IPC Sections 406 (Criminal Breach of Trust) and 420 (Cheating)

HDFC Bank’s Response

HDFC Bank has denied all allegations, calling them “baseless and defamatory.” An official statement read:
“We adhere to strict regulatory compliance. All transactions were authorized as per due process.”

Bank’s Defense Points:

✔ All operations followed RBI guidelines
✔ No evidence of fraudulent activity
✔ Ready to cooperate with investigations

Legal & Financial Implications

1. Regulatory Scrutiny

The Reserve Bank of India (RBI) may probe HDFC’s handling of trust accounts.
SEBI could examine corporate governance lapses.

2. Reputation Risk for HDFC Bank

This case adds to recent controversies, including RBI’s 2024 ban on HDFC’s digital launches.

3. Impact on Lilavati Hospital

Patient care could suffer if funds remain frozen.
The hospital’s expansion plans may stall.

What’s Next?

Economic Offences Wing (EOW) investigation underway.
Court hearings expected in Mumbai sessions court.
Trust may shift banking operations to another institution.

Conclusion: A High-Stakes Battle

This FIR highlights deep governance issues in both the trust and banking sectors. If proven, the allegations could lead to major penalties for HDFC Bank and reshape oversight of high-net-worth accounts.

For now, all eyes are on the EOW’s findings and whether other banks face similar scrutiny.

Do you think HDFC Bank mishandled the trust funds? Share your views below.

(Sources: Mumbai Police FIR copy, HDFC Bank statements, Livemint, Economic Times)

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