[Cites 52, Cited by 0]
Bombay High Court
Lilavati Kirtilal Mehta Medical Trust ... vs Union Of India And Ors on 5 May, 2026
Author: M. S. Karnik
Bench: M. S. Karnik, N. R. Borkar
2026:BHC-AS:21242-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL WRIT PETITION NO.3205 OF 2025
Sashidhar Jagdishan
An individual aged 60 years, son of Mr.
Jagdishan Chandrasekharan having
office address at HDFC Bank Limited,
HDFC Bank House,
Senapati Bapat Marg, Lower Parel
(West), Mumbai - 400013. ... Petitioner
Versus
1. State of Maharashtra
Through Public Prosecutor,
Bombay High Court.
2. Bandra Police Station,
Through Senior Police Inspector,
Hill Road, Bandra West,
Mumbai - 400050.
3. Prashant Kishore Mehta
An individual having address at:
Diamond House, 9 Vatcha Gandhi
Road, Gamdevi, Mumbai - 400007.
4. Lilavati Kirtilal Mehta Medical
Trust (Represented by Mr.
Prashant Mehta Through its
power of attorney holder
Mr. Dinanath Sawant)
An individual aged about 64 years,
having office at Diamond House, 9
Vatcha Gandhi Road, Gamdevi,
Mumbai - 400007. .... Respondents
WITH
INTERIM APPLICATION NO.3378 OF 2025
IN
CRIMINAL WRIT PETITION NO.3205 OF 2025
1
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Lilavati Kirtilal Mehta
Medical Trust (Represented by
Mr. Prashant Mehta Through
its Power of Attorney Holder
Mr. Dinanath Sawant)
An individual aged about 64
years, having office at Diamond
House, 9 Vatcha Gandhi Road,
Gamdevi, Mumbai 400 007 ... Applicant
IN THE MATTER OF
Sashidhar Jagdishan
An individual aged 79 years
having office address at HDFC
Bank Limited, HDFC Bank House,
Senapati Bapat Marg, Lower Parel,
Mumbai - 400 013. ... Petitioner
Versus
1. State of Maharashtra
Through Public Prosecutor,
Bombay High Court.
2. Bandra Police Station,
Through Senior Police Inspector,
Hill Road, Bandra West,
Mumbai - 400 050.
3. Prashant Kishor Mehta
An individual having address at
Diamond House, 9 Vatcha Gandhi
Road, Gamdevi, Mumbai - 400 007.
4. Lilavati Kirtilal Mehta Medical
Trust (Represented by Mr.
Prashant Mehta Through its
Power of Attorney Holder
Mr. Dinanath Sawant)
An individual aged about 64 years,
having office at Diamond House, 9
Vatcha Gandhi Road, Gamdevi,
Mumbai - 400 007. .... Respondents
2
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WITH
CRIMINAL WRIT PETITION NO.3215 OF 2025
Phoenix ARC Private Limited, A
company incorporated under the
Companies Act, 1956 and duly registered
with Reserve Bank of India as an Asset
Reconstruction Company (ARC) under
Section 3 of SARFAESI Act, 2002 and
having its registered office at 3rd Floor,
Wallace Towers, 139-140/B/1, Crossing
of Sahar Road and Western Express
Highway, Vile Parle (East),
Mumbai - 400 057
(through its authorised signatory
Ms. Janhavi Mane, Designation : Manager
Age - 31 years) ... Petitioner
Versus
1. State of Maharashtra
Through Public Prosecutor,
Bombay High Court.
2. Bandra Police Station,
Through Senior Police Inspector,
Hill Road, Bandra West,
Mumbai - 400050.
3. Prashant Kishore Mehta
An individual having address at:
Diamond House, 9 Vatcha Gandhi
Road, Gamdevi, Mumbai - 400007.
4. Lilavati Kirtilal Mehta Medical
Trust (Represented by Mr.
Prashant Mehta Through its
power of attorney holder
Mr. Dinanath Sawant)
An individual aged about 64 years,
having office at Diamond House, 9
Vatcha Gandhi Road, Gamdevi,
Mumbai - 400007. .... Respondents
3
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WITH
CRIMINAL WRIT PETITION NO.3216 OF 2025
Keki Manchersha Elavia,
An individual aged 79 years, having
office at Phoenix ARC Private Limited,
3rd Floor, Wallace Towers, 139-140/B/1,
Crossing of Sahar Road and Western
Express Highway, Vile Parle (East),
Mumbai - 400 057 ... Petitioner
Versus
1. State of Maharashtra
Through Public Prosecutor,
Bombay High Court.
2. Bandra Police Station,
Through Senior Police Inspector,
Hill Road, Bandra West,
Mumbai - 400050.
3. Prashant Kishore Mehta
An individual having address at:
Diamond House, 9 Vatcha Gandhi
Road, Gamdevi, Mumbai - 400007.
4. Lilavati Kirtilal Mehta Medical
Trust (Represented by Mr.
Prashant Mehta Through its
power of attorney holder
Mr. Dinanath Sawant)
An individual aged about 64 years,
having office at Diamond House, 9
Vatcha Gandhi Road, Gamdevi,
Mumbai - 400007. .... Respondents
WITH
CRIMINAL WRIT PETITION NO.3217 OF 2025
Venkattu Srinivasan,
An individual aged 64 years, having
office at Phoenix ARC Private
4
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Limited, 3rd Floor, Wallace Towers,
139-140/B/1, Crossing of Sahar Road
and Western Express Highway,
Vile Parle (East), Mumbai - 400 057 ... Petitioner
Versus
1. State of Maharashtra
Through Public Prosecutor,
Bombay High Court.
2. Bandra Police Station,
Through Senior Police Inspector,
Hill Road, Bandra West,
Mumbai - 400050.
3. Prashant Kishore Mehta
An individual having address at:
Diamond House, 9 Vatcha Gandhi
Road, Gamdevi, Mumbai - 400007.
4. Lilavati Kirtilal Mehta Medical
Trust (Represented by Mr.
Prashant Mehta Through its
power of attorney holder
Mr. Dinanath Sawant)
An individual aged about 64 years,
having office at Diamond House, 9
Vatcha Gandhi Road, Gamdevi,
Mumbai - 400007. .... Respondents
WITH
INTERIM APPLICATION NO.3377 OF 2025
IN
CRIMINAL WRIT PETITION NO.3217 OF 2025
Lilavati Kirtilal Mehta
Medical Trust (Represented by
Mr. Prashant Mehta Through
its Power of Attorney Holder
Mr. Dinanath Sawant)
An individual aged about 64
5
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years, having office at Diamond
House, 9 Vatcha Gandhi Road,
Gamdevi, Mumbai 400 007 ... Applicant
IN THE MATTER OF
Venkattu Srinivasan,
An individual aged 64 years, having
office at Phoenix ARC Private
Limited, 3rd Floor, Wallace Towers,
139-140/B/1, Crossing of Sahar Road
and Western Express Highway,
Vile Parle (East), Mumbai - 400 057 ... Petitioner
Versus
1. State of Maharashtra
Through Public Prosecutor,
Bombay High Court.
2. Bandra Police Station,
Through Senior Police Inspector,
Hill Road, Bandra West,
Mumbai - 400050.
3. Prashant Kishor Mehta
An individual having address at:
Diamond House, 9 Vatcha Gandhi
Road, Gamdevi, Mumbai - 400 007.
4. Lilavati Kirtilal Mehta Medical
Trust (Represented by Mr.
Prashant Mehta Through its
Power of Attorney Holder
Mr. Dinanath Sawant)
An individual aged about 64 years,
having office at Diamond House, 9
Vatcha Gandhi Road, Gamdevi,
Mumbai - 400 007. .... Respondents
WITH
CRIMINAL WRIT PETITION NO.3227 OF 2025
6
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WITH
INTERIM APPLICATION (ST) NO.21717 OF 2025
IN
CRIMINAL WRIT PETITION NO.3227 OF 2025
Lilavati Kirtilal Mehta Medical Trust
Through Mr. Prashant Mehta
Age - 52
(Permanent Trustee for Life)
Having registered office at
A791, Bandra Reclamation,
Bandra West,
Mumbai - 400 050 ... Petitioner
Versus
1. Union of India
Through the Secretary
Department of Personnel &
Training (DOPT) in the Ministry
of Personnel, Pension & Grievances
AND
Central Vigilance Commission (CVC)
2. Central Bureau of Investigation
Through its Joint Director
Central Bureau of Investigation
Bandra, Mumbai
3. State of Maharashtra
Through its Secretary
Having office at Mantralaya, Mumbai
4. Bandra Police Station
Through Senior Police Inspector
Hill Road, Bandra West,
Mumbai - 400 050
5. Sashidhar Jagdishan
HDFC Bank House,
Senapati Bapat Marg,
Lower Parel, Mumbai - 400 013
7
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6. Chetan Mehta
R/at:The Imperial - North Tower,
Apartment 3205, Tardeo,
Mumbai - 400034
7. Rashmi Mehta
Indian Adult,
R/at: Usha Kiran, Flat No.24,
12th Floor, 15, Carmichael Road,
Mumbai - 400 026.
8. Mr. Bhavin Mehta
Indian Adult,
R/at: Usha Kiran, Flat No.24,
12th Floor, 15, Carmichael Road,
Mumbai - 400 026.
9. Mr. Niket Mehta
Indian Adult,
R/at: Maker Tower 'L', 9th Floor,
Flat No.91, Cuffe Parade, Colaba,
Mumbai - 400 005.
10. Mr. Nimesh Sheth
Indian Adult,
R/at: Sweekar Bldg., 1st Floor,
V.P. Road, Vile Parle (West),
Mumbai - 400 056.
11. Mr. Ayushman Mehta
Indian Adult,
R/at: The Imperial - North Tower
Apartment 3205, Tardeo,
Mumbai - 400 034. .... Respondents
WITH
CRIMINAL WRIT PETITION NO.3313 OF 2025
Lilavati Kirtilal Mehta Medical Trust
Through Mr. Prashant Mehta
8
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(Permanent Trustee for Life)
Having registered office at
A791, Bandra Reclamation,
Bandra West, Mumbai - 400 050 ... Petitioner
Versus
1. Union of India
Through the Secretary
Department of Personnel &
Training (DOPT) in the Ministry
of Personnel, Pension & Grievances
AND
Central Vigilance Commission (CVC)
2. Central Bureau of Investigation
Through its Joint Director
Central Bureau of Investigation
Bandra, Mumbai
3. State of Maharashtra
Through its Secretary
Having office at Mantralaya, Mumbai
4. Bandra Police Station
Through Senior Police Inspector
Hill Road, Bandra West,
Mumbai - 400 050
5. Venkattu Srinivasan
Director of Pheonix ARC,
3rd Floor, Wallace Towers,
Vile Parle East, Mumbai,
Maharashtra - 400057
6. Chetan Mehta
R/at:The Imperial - North Tower,
Apartment 3205, Tardeo,
Mumbai - 400034
7. Rashmi Mehta
Indian Adult,
9
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R/at: Usha Kiran, Flat No.24,
12th Floor, 15, Carmichael Road,
Mumbai - 400 026.
8. Bhavin Mehta
Indian Adult,
R/at: Usha Kiran, Flat No.24,
12th Floor, 15, Carmichael Road,
Mumbai - 400 026.
9. Niket Mehta
Indian Adult,
R/at: Maker Tower 'L', 9th Floor,
Flat No.91, Cuffe Parade, Colaba,
Mumbai - 400 005.
10. Nimesh Sheth
Indian Adult,
R/at: Sweekar Bldg., 1st Floor,
V.P. Road, Vile Parle (West),
Mumbai - 400 056.
11. Ayushman Mehta
Indian Adult,
R/at: The Imperial - North Tower
Apartment 3205, Tardeo,
Mumbai - 400 034.
12. Mr. VSN Murthy,
The Then Recovery Officer,
DRT-II Mumbai.
13. Mr. Keki Elavia
Being the Board of Directors,
Phoenix Arc having address at
Phoenix ARC Pvt. Ltd.
158, 5th Floor, Dani Corporate Park,
CST Road, MMRDA Area, Kalina,
Santacruz (E), Mumbai - 400 098
14. Mr. Chandan Bhattacharya
Being the Board of Directors,
10
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Phoenix Arc having address at
Phoenix ARC Pvt. Ltd.
158, 5th Floor, Dani Corporate Park,
CST Road, MMRDA Area, Kalina,
Santacruz (E), Mumbai - 400 098 .... Respondents
****
Mr. Amit Desai, Senior Advocate, a/w Mr. D.P. Singh, Senior
Advocate, Mr. Sandeep Singhi, Mr. Himanshu Sinha, Ms. Chitra
Rentala, Mr. Gopal Krishna Shenoy, Ms. Kriti Srivastava,
Mr. Ritesh Desai, Mr. Parikshith K, Ms. Shravani Maddirala,
Mr. Utkarsh Mishra, i/b Trilegal for the petitioners in
WP/ 3205/2025.
Mr. Ravi Kadam, Senior Advocate a/w Mr. Himanshu Sinha,
Ms. Chitra Rentala, Ms. Kriti Srivastava, Mr.Parikshith K., Ms.
Shravani Maddirala and Mr. Utkarsh Mishra, i/b Trilegal for the
petitioners in WP/3215/2025.
Mr. Charles De Souza a/w Ms. Manaswi Agrawal, Mr. Shantanu
Ray, Ms. Pragati Gothi and Ms. Salomi Kalwade i/b Meraki
Chambers for the petitioners in WP/3216/2025.
Mr. Devadatt Kamat, Senior Advocate a/w Mr. Tarun Mehra,
Mr. Utsav Trivedi, Mr. Monish Bhatia, Ms. Minal Chandnani,
Mr. Harsh Pandya Mr. Shivam Bhushan, H. N. Thakore, Ms. Jyoti
Ghag, Mr. Shailesh Prajapati, and Mr. Ankit Singhal i/b M/s. Dua
Associates for the petitioners in WP/3227/2025.
Mr. Aabad Ponda, Senior Advocate a/w Mr. Rizwan Merchant, Adv.
Monish Bhatia Ms. Minal Chandnani, H.N. Thakore, Ms. Jyoti
Ghag, Mr. Shailesh Prajapati, Mr. Ankit Singhal i/by M/s. Dua
Associates for the petitioner in WP/3313/2025.
Mr. Karan Kadam a/w Mr. Nikhil Rajani, Mr. Ajay Deshmane i/b V.
Deshpande and Co., for the petitioner in WP/3217/2025 and for
respondent No.5 in WP/3313/2025.
Mr. Devadatt Kamat, Senior Advocate a/w Mr. Utsav Trivedi, Ms.
Shivani Bhushan, Mr. Harsh Panday Mr. Monish Bhatia Ms. Minal
Chandnani, Ms. Pooja Kothari, Ms. Urvi Gupte, Ms. Etika
Srivastava, Ms. Tanvi Mate, Ms. Nishi Doshi and Ms. Raghav
11
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Dharmadhikari i/b M/s. Rashmikant and Partners for respondent
No. 3 in WP/3205/2025.
Mr. Devadatt Kamat, Senior Advocate a/w Mr. Aabad Ponda,
Senior Advocate, Mr. Monish Bhatia Ms. Minal Chandnani, Barkha
Motwani and Mr. Rajesh Ranglani i/b MRB Legal for respondent
No. 3 in WP/3217/2025 and WP/3215/2025.
Ms. Pooja Kothari a/w Ms. Urvi Gupte, Ms. Etika Srivastava, Ms.
Tanvi Mate, Ms. Nishi Doshi, Mr. Raghav Dharmadhikari i/b Ms.
Rashmikant and Partners for respondent No.3 in WP/3216/2025.
Mr. Devadatt Kamat, Senior Advocate a/w Mr. Aabad Ponda,
Senior Advocate a/w Mr. Hemant Ingle, Mr. Abhishek Prabhu, H.
N. Thakore, Ms. Jyoti Ghag, Mr. Shailesh Prajapati,
Mr. Ankit Singhal i/by M/s. Dua Associates for respondent No.4
in WP/3205/2025, WP/3215/2025, WP/3216/2025, and
WP/3217/2025.
Mr. Amit Desai, Senior Advocate, a/w Mr. D.P. Singh, Senior
Advocate, Mr. Sandeep Singhi, Mr. Himanshu Sinha, Ms. Chitra
Rentala, Mr. Gopal Krishna Shenoy, Ms. Kriti Srivastava, Mr.
Parikshith K, Ms. Shravani Maddirala, Mr. Utkarsh Mishra, i/b
Trilegal for respondent No.5 in WP/ 3227/2025.
Mr. Sudeep Pasbola Senior Advocate a/w Adv. Lakshmi
Raman,Manisha Prajapati, Mhendi Nakrani i/b Dhiren H. Shah for
respondent Nos.6, 10 and 11 in WP/3313/2025 and
WP/3227/2025.
Mr. Charles De Souza a/w Ms. Manaswi Agrawal, Mr. Shantanu
Ray, Ms. Pragati Gothi and Ms. Salomi Kalwade i/b Meraki
Chambers for respondent No.13 in WP/3313/2025.
SPP Mr. Amit Munde, SSP a/w Mr. Jai Vohra, Mr. Shantanu
Nakashe for CBI, ACB (Mumbai), for respondent No.2 in
WP/3227/2025 and WP/3313/2025.
Smt. Mahalaxmi Ganpati, APP a/w Smt. M. S. Bajoria, APP, and Mr.
Pankaj Deokar, APP for State.
API, Rajendra Shivade, a/w P.I. Mundale, EOW, Mumbai.
12
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CORAM : M. S. KARNIK &
N. R. BORKAR, JJ.
RESERVED ON : 8th OCTOBER, 2025
29th JANUARY, 2026
PRONOUNCED ON : 5th MAY, 2026
JUDGMENT (PER M. S. KARNIK, J.) :
1. Since common issues are involved in respect of the same
FIR and by and large similar allegations are levelled against the
petitioners, all these writ petitions are disposed of by a common
judgment.
2. Writ Petition Nos.3205 of 2025, 3215 of 2025, 3216 of
2025, 3217 of 2025 were reserved for judgment on 08/10/2025.
Since according to learned counsel, the decision in the present set
of writ petitions would have a bearing on Criminal Writ Petition
Nos.3227 of 2025 and 3313 of 2025, a request was made for
hearing Criminal Writ Petition Nos.3227 of 2025 and 3313 of 2025
for transfer of the investigation to the Central Bureau of
Investigation ("CBI", for short) as well along with this group.
Accordingly, we have heard Criminal Writ Petition Nos.3227 of
2025 and 3313 of 2025 and closed the same for orders on
29/01/2026.
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3. The petitioner-Sashidhar Jagdishan by this writ petition
(Writ Petition No.3205 of 2025) under Articles 226 and 227 of the
Constitution of India read with Section 528 of the Bhartiya
Nagarik Suraksha Sanhita, 2023 (corresponding to Section 482 of
the erstwhile Code of Criminal Procedure, 1973) seeks quashing of
(i) FIR No.0818 of 2025 registered at Bandra Police Station under
Sections 406, 409 and 420 read with Section 34 of the Indian
Penal Code, 1860 ("IPC", for short), and (ii) the order dated
29/05/2025 passed by the learned Judicial Magistrate First Class,
12th Court, Bandra in S.W. No.63 of 2025 directing registration of
the said FIR. The petitioner is the Managing Director and Chief
Executive Officer of HDFC Bank Limited. There is another FIR
bearing No.0819 of 2025 levelling similar allegations against the
accused, of which quashment is sought.
4. The long and short of the petitioner's case is that the
criminal proceedings initiated by the respondent No.3-complainant
constitute a gross abuse of process of law and have been initiated
with malafide intent to harass him and tarnish the reputation of
HDFC Bank. Mr. Amit Desai, learned Senior Advocate for the
petitioner submitted that the FIR is a fallout of long-standing
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recovery and enforcement proceedings initiated by HDFC Bank
against the complainant's family for default in repayment of
substantial dues exceeding Rs.65 crores.
5. The allegation in the complaint made by the respondent
No.3-Mr. Prashant Mehta ("complainant" for short) is that in 2006,
Mr. Chetan Mehta (original accused No.1) and others fraudulently
and illegally gained control over the Lilavati Kirtilal Mehta Medical
Trust ("the Trust", for short) and in collusion with other accused
and with corrupt motive, used the Trust's funds for their own gains
and for personal litigation.
6. Pursuant to the judgment of the Hon'ble Supreme Court
dated 18/08/2023 and the consequent order dated 14/12/2023
passed by the Assistant Charity Commissioner under the
Maharashtra Public Trusts Act, 1950, new trustees, the
complainant being one of them, were appointed thereby removing
the accused No.1 and other trustees from the Trust. After gaining
control over the Trust, the complainant discovered that records
pertaining to financial misconduct in the Trust had been destroyed
by the accused persons before leaving the Trust. However, certain
documents, including a photocopy of the cash register, indicated
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cash transactions clearly demonstrating misuse of Trust funds.
7. It is alleged that in 1969, Mr. Kishore Mehta
(complainant's father), Mr. Vijay Mehta and Mr. Prabodh Mehta
(complainant's uncles) established a partnership named Beautiful
Diamond Limited, a diamond trading company. The company
availed a loan from Global Trust Bank, which merged into Oriental
Bank, then into United Bank of India, and eventually into Punjab
National Bank. During the course of recovery of the unpaid dues,
Punjab National Bank transferred the loans, rights, shares, benefits
and related financial agreements to Phoenix ARC Private Limited
(petitioner in Writ Petition No.3215 of 2025, accused No.9 in the
FIR) by an Assignment Deed on 30/09/2013. Subsequently,
Phoenix ARC Private Limited, under the supervision of accused
Nos.10 and 11, communicated with the borrower company for
negotiations.
8. That consent terms were filed before the Debts Recovery
Tribunal ("DRT", for short) on 01/10/2013, pursuant to which 14
security cheques were handed over by Splendor Gems Limited to
accused No.9, Keki Elavia, Director of Phoenix ARC Private
Limited. A mortgage deed was purportedly executed against the
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immovable properties listed in Table 1 of the consent terms of the
borrower company. After issuance of recovery certificates, the
mortgaged assets were auctioned and sold by the borrower
company through recovery officers. Approximately, property worth
Rs.81 crores was sold, in which accused No.8/Phoenix ARC Private
Limited was entitled to a significant share of the sale proceeds. The
loans availed by the borrower company were insured by Export
Credit Guarantee Corporation of India ("ECGCI", for short),
entitling Oriental Bank to 90% insurance amount benefit in case of
default of the loan, which amount, the complainant claims, is
likely to have been received by the bank.
9. The complainant alleges that the recovery process was
executed fraudulently by Phoenix ARC Private Limited by
concealing material facts, with the sole intention to mentally
harass late Mr. Kishore Mehta and Mr. Rajesh Mehta and the
pressure created by the controversy, led to causing the death of Mr.
Kishore Mehta. It is alleged that HDFC Bank and Phoenix ARC
initiated fraudulent litigation despite the debt being repaid.
10. The complainant has placed heavy reliance on the
photocopy of a cash diary which according to him shows the
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entries regarding large payments made by accused Nos.1 to 7
(erstwhile trustees) to Senior Phoenix ARC Officials (accused
Nos.8 to 11) and the petitioner as well as other accused persons.
11. Thereafter, on 17/04/2025, Lilavati Kirtilal Mehta
Medical Trust (through respondent No.3) moved Application No.
C.C. 63/SW/2025 under Section 175(3) of the BNSS, seeking
direction for registration of an FIR on the basis of the same
allegations. The Bandra Police, by its report dated 27/05/2025,
pointed out that three FIRs were already pending on identical
issues - (i) FIR No. 972/2024 (Sect. 406, 420, 34 IPC), (ii) FIR No.
1916/2024 (Sect. 406, 409, 420, 465, 467, 34 IPC), and (iii) FIR
No. 375/2025 (Sect. 403, 406, 409, 420, 465, 467, 471, 474 IPC)
-- and hence no fresh FIR was warranted.
12. The learned JMFC passed the impugned orders dated
29/05/2025, directing registration of FIR's under Sections 406,
409 and 420 read with Section 34 of IPC against the petitioners
and certain former trustees of the Lilavati Trust. Pursuant thereto,
FIR No.0818 of 2025 and FIR No.0819 of 2025 was registered on
31/05/2025 at Bandra Police Station.
SUBMISSIONS ON BEHALF OF THE LEARNED SENIOR
ADVOCATES FOR THE PETITIONERS :-
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13. Mr. Amit Desai, Mr. Ravi Kadam, learned Senior
Advocates, Mr. Charles De Souza, learned counsel appearing for
the petitioners submit that the impugned order dated 29/05/2025,
passed by the learned JMFC, Bandra, in C.C. No.63/SW/2025,
directing registration of an FIR against the petitioner and officials
of HDFC Bank under Sections 406, 409 and 420 read with Section
34 of the IPC, is patently erroneous, contrary to law, and
unsustainable.
14. Learned Senior Advocates submit that the impugned
order amounts to a gross abuse of the criminal process, being
founded on purely civil and recovery proceedings that have
already attained finality through orders of the DRT and this Court.
The allegations, even if taken at face value, do not disclose any
entrustment or dishonest inducement which are the essential
ingredients of Sections 406, 409 or 420 of IPC.
15. It is further contended that Section 175(3) of the BNSS
confers no mechanical right to seek registration of an FIR where
the allegations have already been examined and rejected. The
Magistrate failed to appreciate the binding effect of prior judicial
orders and the bar against multiplicity of proceedings on identical
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facts.
16. The petitioner relies upon the settled principle laid down
by the Hon'ble Supreme Court in State of Haryana vs. Bhajan Lal 1,
and Zandu Pharmaceutical Works Ltd. vs. Mohd. Sharaful Haq 2, to
contend that where the allegations are civil in nature and
manifestly attended with malafides, the High Court is empowered
to quash the proceedings under Article 226 or Section 482 to
prevent abuse of process.
17. It is thus submitted that the impugned order dated
29/05/2025 and the consequent FIR's deserve to be quashed and
set aside, being arbitrary, repetitive, and contrary to settled law.
18. The decisions relied upon by the learned Senior Advocate
for the petitioner are as under :-
(1) Priyanka Srivastava vs. State of U.P.3
(2) Anil Kumar vs. M.K. Aiyappa4
(3) Pepsi Foods Ltd. vs. Special Judicial Magistrate5
(4) State of Haryana vs. Bhajan Lal (supra)
(5) Zandu Pharmaceutical Works Ltd. vs. Mohd.
Sharaful Haque (supra)
1 1992 Supp (1) SCC 335
2 (2005) 1 SCC 122
3 (2015) 6 SCC 287
4 (2013) 10 SCC 705
5 (1998) 5 SCC 749
Bhogale wp-3205-2025.odt
(6) HDFC Bank Ltd. vs. J.J. Manners6
(7) M/s Thermax Ltd. vs. K.M. Johny7
(8) G. Sagar Suri vs. State of U.P.8
(9) HDFC Bank Ltd. vs. State of Gujarat9
(10) Vineet Kumar vs. State of U.P.10
SUBMISSIONS ON BEHALF OF THE LEARNED APP FOR THE
STATE :-
19. Learned APP for the State opposed the writ petition. It is
submitted that the orders passed by the Trial Court are well
reasoned. It is submitted that the allegations made in the
complaint are sufficient to constitute the ingredients of the offence
alleged and hence an in-depth investigation is necessary. It is
submitted that the investigation should be allowed to proceed and
that no case is made out for quashing the FIR. Learned APP
argued in support of the submissions made by the learned Senior
Advocates for the respondents.
SUBMISSIONS ON BEHALF OF THE LEARNED SENIOR
ADVOCATE FOR RESPONDENT NO.3-COMPLAINANT :-
20. Mr. Devadatt Kamat, learned Senior Advocate appearing
6 2022 SCC OnLine Bom 1170
7 (2011) 13 SCC 412
8 (2000) 2 SCC 636
9 2021 SCC OnLine Guj 2603
10 (2017) 13 SCC 369
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for respondent No.3 supports the impugned order, submitting that
the learned Magistrate acted within his jurisdiction and that the
material on record prima facie discloses the commission of
cognizable offences warranting investigation.
21. It is contended that the petitioner's challenge is
misconceived, as the allegations reveal dishonest conduct and
criminal breach of trust on the part of the Bank officials in
collusion with former trustees of the Lilavati Kirtilal Mehta Medical
Trust. The complaint was supported by documentary material
sufficient to justify an order under Section 175(3) of the BNSS.
22. Learned Senior Advocate further submits that allegations
of malafide are irrelevant at this preliminary stage. Once an FIR
discloses cognizable offences, the veracity of allegations must be
tested through investigation, not by pre-emptive quashing.
Reliance is placed on CBI vs. Ravi Shankar Srivastava 11, and State
of Orissa vs. Saroj Kumar Sahoo12. It is urged that under the
principle in State of Haryana vs. Bhajan Lal (supra), the
extraordinary jurisdiction of this Court is to be exercised sparingly
and not to stifle legitimate investigation at inception.
11 (2006) 7 SCC 188
12 (2005) 13 SCC 540
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23. Accordingly, respondent No.3 prays that the petition be
dismissed and the investigation be permitted to proceed in
accordance with the law.
SUBMISSIONS ON BEHALF OF THE LEARNED SENIOR
ADVOCATE FOR RESPONDENT NO.4 :-
24. Mr. Aabad Ponda, learned Senior Advocate appearing on
behalf of respondent No.4 (Lilavati Kirtilal Mehta Medical Trust)
supports the order dated 29/05/2025 passed by the learned JMFC,
Bandra, and the consequent registration of FIR No.0818 of 2025. It
is submitted that the learned Magistrate acted well within his
jurisdiction under Section 175(3) of the Bharatiya Nagarik
Suraksha Sanhita (BNSS), and that minor procedural lapses, if any,
do not vitiate the proceedings.
25. Learned Senior Advocate contends that the material
placed before the learned Magistrate prima facie disclosed
commission of cognizable offences under Sections 406, 409 and
420 read with Section 34 of the IPC, necessitating registration of
an FIR for investigation in accordance with law. Reliance is placed
on the principle that when allegations disclose ingredients of a
cognizable offence, the Magistrate is not expected to evaluate the
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sufficiency of evidence at the pre‐investigation stage.
26. It is argued that Section 175(3) of the BNSS (analogous
to Section 156(3) of the CrPC) confers ample power on the
Magistrate to order registration of an FIR, and that the procedural
steps contemplated under Sections 173(1) and 173(4) of the BNSS
are directory in nature. Any omission in forwarding or
acknowledging the written representation to the Superintendent of
Police cannot be treated as fatal. Non‐compliance, at most, would
constitute an irregularity curable under Section 511 of the BNSS
(formerly Section 465 of the CrPC) if no failure of justice is shown.
In support, reliance is placed on Pradeep Wodeyar vs. State of
Karnataka13; HDFC Securities vs. State of Maharashtra14; Girish
Kumar Suneja vs. CBI15.
27. It is further submitted that the requirement of an affidavit
accompanying an application under Section 175(3) of the BNSS is
a mere procedural formality intended to ensure the authenticity of
allegations. Failure to strictly comply with the prescribed
verification format cannot result in the nullification of judicial
proceedings once the Magistrate, upon application of mind, has
13 (2021) 19 SCC 62
14 (2017) 1 SCC 640
15 (2017) 14 SCC 809
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passed a reasoned order. The law laid down in Anurag Bhatnagar
vs. State of NCT of Delhi16, is cited to contend that non‐compliance
with pre‐requisites under Section 154(3) of the CrPC is only a
procedural irregularity that does not vitiate the Magistrate's
jurisdiction when he is otherwise satisfied that an investigation is
warranted.
28. Respondent No. 4 also contends that the allegations of
malafide or collateral motive raised by the petitioner are irrelevant
at this stage. Once the FIR is registered and the investigation
initiated, the veracity of allegations must be tested through
evidence. The motive or bonafide of the complainant cannot by
itself be a ground to quash an FIR which otherwise discloses
cognizable offences. Reliance is placed on Central Bureau of
Investigation vs. Ravi Shankar Srivastava (supra), and State of
Orissa vs. Saroj Kumar Sahoo (supra), for the proposition that
mala fides of the complainant may not be the sole basis for
quashing investigations into cognizable offences.
29. It is submitted that HDFC Bank and its officials cannot
claim immunity from criminal liability merely because they acted
as officers of a financial institution. Where allegations suggest
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collusion with former trustees of the Trust in the mismanagement
of funds, the matter necessarily requires an independent
investigation and cannot be scuttled at the threshold. Reliance is
placed on the decision in Bhajan Lal (supra) to submit that while
the High Court may exercise powers to prevent abuse of process,
such jurisdiction must be used sparingly and only where the
complaint is manifestly attenuated with malafides or does not
disclose any offence.
30. Learned Senior Advocate lastly contends that the petition
is premature as the investigation is at a nascent stage and factual
disputes ought to be decided only after the collection of relevant
evidence by the investigating agency. Accordingly, it is prayed that
this Court should decline to exercise extraordinary jurisdiction and
permit the investigation to proceed in accordance with the law.
31. The decisions relied upon by the learned Senior
Advocates for the respondent Nos.3 and 4 are as under :-
(1) Pradeep Wodeyar vs. State of Karnataka (supra)
(2) HDFC Securities Ltd. vs. State of Maharashtra
(supra)
(3) Girish Kumar Suneja vs. CBI (supra)
Bhogale wp-3205-2025.odt
(4) Anurag Bhatnagar vs. State of NCT of Delhi
(supra)
(5) CBI vs. Ravi Shankar Srivastava (supra)
(6) State of Orissa vs. Saroj Kumar Sahoo (supra)
(7) State of Haryana vs. Bhajan Lal (supra)
32. We have heard learned counsel. Perused the materials on
record.
CONSIDERATION
33. Before we proceed to examine the rival contentions, we
must refer to the relevant provisions and seek guidance from the
well settled legal principles laid down by the Hon'ble Supreme
Court when it comes to issues concerning quashing of FIR based
on a complaint and especially when the investigation is at a
nascent stage.
34. Section 482 of the CrPC confers upon this Court inherent
powers. The Said Section reads thus:
"482. Saving of inherent powers of High Court.
- Nothing in this Code shall be deemed to limit or affect the
inherent powers of the High Court to make such orders as may
be necessary to give effect to any order under this Code, or to
prevent abuse of the process of any Court or otherwise to
secure the ends of justice"
Bhogale wp-3205-2025.odt
35. The Section provides that this Court may make any such
orders as necessary in the following circumstances:
(i) To give effect to any order passed under the provisions
of CrPC
(ii) to prevent abuse of process of any Court, or
(iii) to secure the ends of justice
36. In State of Haryana vs. Bhajan Lal (supra), the Hon'ble
Supreme Court has examined the scope of the inherent power
under Section 482 of the Cr.P.C. and the categories of cases where
the High Court may exercise its power relating to cognizable
offences. Their Lordships enumerated these categories as follows:
"105. In the backdrop of the interpretation of the various
relevant provisions of the Code under Chapter XIV and of the
principles of law enunciated by this Court in a series of
decisions relating to the exercise of the extra-ordinary power
under Article 226 or the inherent powers Under Section 482 of
the Code which we have extracted and reproduced above, we
give the following categories of cases by way of illustration
wherein such power could be exercised either to prevent abuse
of the process of any Court or otherwise to secure the ends of
justice, though it may not be possible to lay down any precise,
clearly defined and sufficiently channelised and inflexible
guidelines or rigid formulae and to give an exhaustive list of
myriad kinds of cases wherein such power should be
exercised.
1. Where the allegations made in the First Information
Report or the complaint, even if they are taken at their face
value and accepted in their entirety do not prima-facie
constitute any offence or make out a case against the accused.
Bhogale wp-3205-2025.odt
2. Where the allegations in the First Information Report
and other materials, if any, accompanying the F.I.R. do not
disclose a cognizable offence, justifying an investigation by
police officers under Section 156(1) of the Code except under
an order of a Magistrate within the purview of Section 155(2)
of the Code.
3. Where the uncontroverted allegations made in the FIR
or complaint and the evidence collected in support of the same
do not disclose the commission of any offence and make out a
case against the accused.
4. Where, the allegations in the F.I.R. do not constitute a
cognizable offence but constitute only a non-cognizable
offence, no investigation is permitted by a police officer
without an order of a Magistrate as contemplated Under
Section 155(2) of the Code.
5. Where the allegations made in the FIR or complaint are
so absurd and inherently improbable on the basis of which no
prudent person can ever reach a just conclusion that there is
sufficient ground for proceeding against the accused.
6. Where there is an express legal bar engrafted in any of
the provisions of the Code or the concerned Act (under which
a criminal proceeding is instituted) to the institution and
continuance of the proceedings and/or where there is a
specific provision in the Code or the concerned Act, providing
efficacious redress for the grievance of the aggrieved party.
7. Where a criminal proceeding is manifestly attended with
malafide and/or where the proceeding is maliciously instituted
with an ulterior motive for wreaking vengeance on the
accused and with a view to spite him due to private and
personal grudge."
37. It is settled law that the inherent powers are to be
exercised by this Court in exceptional circumstances to achieve the
purpose/s outlined under the said Section. In Janata Dal vs. H.S.
Bhogale wp-3205-2025.odt
Chowdhary17, the Hon'ble Supreme Court has exhaustively dealt
with the scope of inherent powers conferred by Section 482 of the
CrPC and it was held thus:
"137. This inherent power conferred by Section 482 of the
Code should not be exercised to stifle a legitimate
prosecution. The High Court being the highest court of a
State should normally refrain from giving a premature
decision in a case wherein the entire facts are extremely
incomplete and hazy, more so when the evidence has not
been collected and produced before the Court and the issues
involved whether factual or legal are of great magnitude and
cannot be seen in their true perspective without sufficient
material. Of course, no hard and fast rule can be laid down in
regard to the cases in which the High Court will exercise its
extraordinary jurisdiction of quashing the proceedings at any
stage. This Court in State of Haryana v. Ch. Bhajan Lal to
which both of us were parties have dealt with this question at
length and enunciated the law listing out the circumstances
under which the High Court can exercise its jurisdiction in
quashing proceedings."
38. It is also well settled that at the stage of the FIR, the
courts should refrain from interfering especially when the FIR
discloses the commission of a cognizable offence and statutory
power of police to investigate cannot be interfered with in exercise
of the inherent power of the Court.
39. The Hon'ble Supreme Court, in Imran Pratapgarhi vs.
State of Gujarat & Anr.18, discussed the scope of the High Court's
inherent powers to quash criminal proceedings. It clarified that the
17 (1992) 4 SCC 305
18 (2026) 1 SCC 721
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High Court can use its powers under Article 226 of the
Constitution and Section 482 of the Code of Criminal Procedure,
1973 (now Section 528 of the BNSS) even when the investigation
is at an early stage. The court rejected the idea that there is a strict
rule preventing interference during the initial stage of
investigation and observed that the decision on whether the
criminal proceedings ought to be quashed or not should depend
largely on the facts and circumstances of each case. The following
observation is relevant :-
"47. We fail to understand how the High Court concluded
that the message was posted in a manner that would certainly
disturb social harmony. Thereafter, the High Court gave a
reason that the investigation was at a nascent stage. There is
no absolute rule that when the investigation is at a nascent
stage, the High Court cannot exercise its jurisdiction to quash
an offence by exercising its jurisdiction under Article 226 of
the Constitution of India or under Section 482 CrPC
equivalent to Section 528 BNSS. When the High Court, in the
given case, finds that no offence was made out on the face of
it, to prevent abuse of the process of law, it can always
interfere even though the investigation is at the nascent stage.
It all depends on the facts and circumstances of each case as
well as the nature of the offence. There is no such blanket
rule putting an embargo on the powers of the High Court to
quash FIR only on the ground that the investigation was at a
nascent stage. If such embargo is taken as an absolute rule, it
will substantially the powers of the High Court which have
been laid down and recognised by this Court in State of
Haryana v. Bhajan Lal."
40. A chronology of events from the materials on record, at
the cost of repetition, would be useful to appreciate the
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controversy properly. A consortium of banks in 1995, including
HDFC Bank sanctioned loan facilities to Splendour Gems Limited
(formerly Beautiful Diamonds Ltd.), a company owned and
managed by the complainant's family. Late Mr. Kishore Mehta
along with his sons Mr. Rajesh Mehta and Mr. Rajiv Mehta,
executed personal guarantees in favour of lending banks. On
persistent default in repayment, HDFC Bank filed Original
Application (OA) No.146 of 2002 before the DRT, Mumbai seeking
recovery of Rs.14,74,51,929.35 with interest at the rate of 16%
p.a. from the borrower and guarantors, jointly and severally.
41. The DRT, Mumbai by the order dated 26/10/2004
allowed OA No.146 of 2002 and directed the borrower and
guarantors to jointly and severally pay Rs.14,74,51,929.35 with
interest at the rate of 16% p.a. from the date of the application till
realisation. Pursuant to the order passed by the DRT, a recovery
certificate was issued by the DRT in favour of HDFC Bank on
30/11/2004. Despite the recovery certificate, the borrower and
guarantors evaded payment and filed multiple applications before
various fora between 2004 to 2020 challenging attachment,
valuation, and recovery steps to obstruct full realisation. The DRT
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issued arrest warrants against Late Mr. Kishore Mehta, Mr. Rajesh
Mehta and Mr. Rajiv Mehta on 05/02/2020. In the order, strong
observations were made by the DRT on their conduct saying
"Enough is Enough".
42. The order of the DRT was challenged before this Court.
This Court remanded the matter to the DRT. By an order dated
25/10/2023, the DRT reconfirmed its earlier coercive orders,
including arrest warrants and attachment of assets against the
guarantors.
43. Late Mr. Kishore Mehta and Mr. Rajesh Mehta filed Writ
Petition (L) No.2604 of 2024 before this Court challenging the
DRT's 26/10/2004 order and recovery certificate after a delay of
nearly two decades. This Court dismissed Writ Petition (L)
No.2604 of 2024 vide order dated 03/05/2024 holding that the
challenge was grossly delayed and devoid of merit. On
01/03/2024 the Lilavati Trust by its Board Resolution authorised
respondent No.3-complainant to file complaints and institute legal
proceedings on behalf of the Trust. Respondent No.3 filed
complaints dated 25/04/2024 and 26/08/2024 before the Reserve
Bank of India and Ministry of Finance, alleging misconduct by
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HDFC Bank officials (including the petitioner). Both complaints
were found meritless and no action was taken.
44. Due to the demise of Mr. Kishore Mehta on 20/05/2024,
his heirs respondent No.3 and Mrs. Charu Mehta were substituted
in the pending DRT proceedings. On 05/07/2024 the complainant
and Mrs. Charu Mehta were formally impleaded as legal
representatives of Late Mr. Kishore Mehta in the DRT matter in the
proceedings in respect of the order which is under challenge in
Writ Petition (L) No.25597 of 2024. On the same day i.e.
05/07/2024, Lilavati Trust through the complainant filed CC
No.105/SW/2024 under Section 156(3) of Code of Criminal
Procedure ("CrPC", for short) before the JMFC, Bandra alleging
culpable homicide (Sections 304, 120B and 34 of IPC) against
HDFC Bank officials. The JMFC dismissed the complaint on
03/08/2024 holding that the acts of the bank were lawful and
pursuant to judicial orders.
45. Mr. Rajesh Mehta filed a complaint dated 22/07/2024
before the Maharashtra State Minorities Commission alleging that
HDFC Bank had discriminated against the Jain community. This
Court by an order dated 18/09/2024 passed in Writ Petition (L)
Bhogale wp-3205-2025.odt
No.23881 of 2024, quashed the Minorities Commission
proceedings, holding them to be frivolous, vexatious and intended
to evade the legally determined debt liability.
46. HDFC Bank issued a Cease and Desist Notice dated
10/09/2024 to Lilavati Trust (through Permanent Trustee Mrs.
Charu Mehta) urging cessation of defamatory actions and
harassment of bank officials. The complainant filed a police
complaint under Section 173(1) of the BNSS (Section 154(1) of
the CrPC) on 12/09/2024 at the Bandra Police Station alleging
offences under Sections 406, 409, 420 read with Section 34 of IPC
based on alleged cash register entries of Rs.2.05 crores between
16/03/2022 and 21/06/2023. The said complaint was received by
Bandra Police Station on 16/09/2024 and marked "CC" to the
Deputy Commissioner of Police, Bandra Division.
47. The Trust through the complainant represented by POA
holder Mr. Dinanath Sawant on 17/04/2025 filed application
No.CC 63/SW/2025 under Section 175(3) of the BNSS before
JMFC, Bandra, seeking direction for registration of FIR based on a
2008 Power of Attorney ("POA", for short).
48. Bandra Police filed its reply dated 27/05/2025 informing
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the JMFC that three FIRs were already registered on identical
allegations viz. (i) FIR No.972 of 2024 (Sections 406, 420, 34 of
IPC), (ii) FIR No.1916 of 2024 (Sections 406, 409, 420, 465, 467,
34 of IPC), and (iii) FIR No.375 of 2025 (Sections 403, 406, 409,
420, 465, 467, 471, 474 of IPC) and hence, no further FIR was
warranted. By the order dated 29/05/2025 the JMFC, Bandra
passed an order in CC No.63/SW/2025 directing registration of
FIR under Sections 406, 409 and 420 read with Section 34 of IPC
against the petitioner and former Trustees of Lilavati Trust. A
similar order was simultaneously passed in CC No.SW/49/2025
against Phoenix ARC Private Limited. Pursuant to the JMFC's order
dated 29/05/2025, FIR No.0818 of 2025 was registered at Bandra
Police Station on 31/05/2025 under Sections 406, 409 and 420
read with Section 34 of IPC against the petitioner and HDFC Bank
officials. On the same day, FIR No.0819 of 2025 was registered
against Phoenix ARC Private Limited and its directors.
49. In terms of the DRT order dated 26/10/2004 the
complainant and his family members continue to owe HDFC Bank
an outstanding sum exceeding Rs.65 crores as on 31/05/2025.
50. We thus find that the entire dispute arises out of loan
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facilities sanctioned in 1995 to Splendour Gems Ltd. (formerly
Beautiful Diamonds Ltd.), a company owned and controlled by the
complainant's family. The late Mr. Kishore Mehta and his sons Mr.
Rajesh Mehta and Mr. Rajiv Mehta, executed personal guarantees
in favour of the lending banks, including HDFC Bank.
51. Upon persistent default in repayment, HDFC Bank filed
O.A. No.146 of 2002 before the Debts Recovery Tribunal, Mumbai,
seeking recovery of Rs.14,74,51,929.35 crore with at the rate of 16
% p.a. interest. The DRT, by order dated 26/10/2004, allowed the
application and directed the borrower and guarantors to jointly
and severally pay the dues. A Recovery Certificate was issued on
30/11/2004 in favour of HDFC Bank.
52. Despite these orders, the borrower and guarantors evaded
repayment for nearly two decades, initiating multiple proceedings
before various fora to obstruct recovery. The DRT, by its order
dated 05/02/2020, even issued arrest warrants against the
guarantors.
53. Subsequent proceedings, including Writ Petition (L) No.
2604 of 2024, filed by the Mehta family to challenge the 2004 DRT
order, were dismissed by this Court on 03/05/2024 on grounds of
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gross delay and absence of merit.
54. Following the demise of late Mr. Kishore Mehta on
20/05/2024, his heirs, including respondent No.3 (Prashant
Mehta) and Mrs. Charu Mehta, were impleaded as legal
representatives in the recovery proceedings. Thereafter, respondent
No. 3 and his family began a series of complaints against HDFC
Bank officials, including complaints to the RBI and Ministry of
Finance (25/04/2024 and 26/08/2024), both found meritless; a
complaint before the Maharashtra State Minorities Commission
(22/07/2024), later quashed by the High Court on 18/09/2024 as
vexatious; and a criminal complaint under Section 156(3) of the
CrPC (C.C. No.105/SW/2024) before the JMFC, Bandra, was
dismissed on 03/08/2024, holding that the Bank's actions were
lawful and pursuant to judicial orders.
55. Despite these categorical judicial findings, the
complainant persisted in filing complaints. On 12/09/2024,
respondent No.3 filed yet another police complaint at Bandra
Police Station, alleging offences under Sections 406, 409, 420 read
with Section 34 of IPC based on alleged cash entries between
March 2022 and June 2023. Upon inquiry, the police found no
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cognizable offence and reported accordingly.
56. Thereafter, on 17/04/2025, Lilavati Kirtilal Mehta
Medical Trust (through respondent No.3) moved Application No.
C.C. 63/SW/2025 under Section 175(3) of the BNSS, seeking
direction for registration of an FIR on the same allegations. The
Bandra Police, by its report dated 27/05/2025, pointed out that
three FIRs were already pending on identical issues - (i) FIR No.
972/2024 (Sect. 406, 420, 34 IPC), (ii) FIR No. 1916/2024 (Sect.
406, 409, 420, 465, 467, 34 IPC), and (iii) FIR No. 375/2025
(Sect. 403, 406, 409, 420, 465, 467, 471, 474 IPC) -- and hence
no fresh FIR was warranted.
57. The learned JMFC passed the impugned order dated
29/05/2025, directing registration of FIR under Sections 406, 409
and 420 read with Section 34 of IPC against the petitioners and
certain former trustees of the Lilavati Trust. Pursuant thereto, FIR
Nos.0818 of 2025 and 0819 of 2025 was registered on
31/05/2025 at Bandra Police Station.
58. It is well settled principle laid down by the Hon'ble
Supreme Court in State of Haryana vs. Bhajan Lal (supra), and
Zandu Pharmaceutical Works Ltd. vs. Mohd. Sharaful Haque
Bhogale wp-3205-2025.odt
(supra), that where the allegations are civil in nature and
manifestly attended with mala fides, the High Court is empowered
to quash the proceedings under Article 226 or Section 482 to
prevent abuse of process.
59. As learned Senior Advocate for the respondent Nos.3 and
4 submitted undoubtedly when the FIR discloses cognizable
offences, the veracity of allegations must be tested through
investigation, not by pre-emptive quashing. The extraordinary
jurisdiction of this Court is to be exercised sparingly and not to
stifle legitimate investigation at inception.
60. We are in complete agreement with learned Senior
Advocate that HDFC Bank and its officials cannot claim immunity
from criminal liability merely because they acted as officers of a
financial institution. Undoubtedly where allegations suggest
collusion with former trustees of the Trust in the mismanagement
of funds, the matter necessarily requires an independent
investigation and cannot be scuttled at the threshold.
61. However, we cannot lose sight of the background facts
which are already on record. The HDFC Bank was pursuing the
recovery proceedings before the DRT where several orders have
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been passed against the erstwhile trustees for recovery of the
amount. The substantial dues are yet to be recovered by the HDFC
Bank. The HDFC Bank has proceeded against the Trust which was
then managed by the erstwhile trustees who are the accused Nos.1
to 7 in this complaint. Now what we could gather from the
submissions of learned Senior Advocates for the petitioners and
even from the materials on record, it is due to the pressure exerted
by the Banks in the course of the recovery proceedings for
recovering the dues that led to the respondent No.3 firmly
believing that these officials are responsible for the death of Mr.
Kishore Mehta on 20/05/2024.
62. The respondent No.3 and Mrs. Charu Mehta being the
legal heirs of Mr. Kishore Mehta were substituted in the pending
DRT proceedings. A complaint was made to the Reserve Bank of
India and Ministry of Finance on 25/04/2024 and 26/08/2024
against the HDFC Bank officials. Both complaints were found to be
meritless. Then a complaint was made before the Maharashtra
State Minorities Commission on 22/07/2024. This complaint was
quashed by the order of this Court on 18/09/2024 as vexatious. A
criminal complaint under Section 156(3) of the CrPC before the
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JMFC, Bandra was dismissed on 03/08/2024, holding that the
Bank's actions were lawful and pursuant to judicial orders. It is the
contention of the petitioner that the erstwhile trustees accused
Nos.1 to 7 herein destroyed all the records when the new trustees
took charge.
63. To demonstrate that the erstwhile trustees and the
petitioners were responsible for financial misappropriation,
reliance is placed on a photocopy of a cash diary which shows the
entries regarding large payments made by accused Nos.1 to 7 to
the petitioners. It would be significant to extract the relevant
portion of the FIR dated 31/05/2025 lodged by the complainant.
"It is pertinent that Chetan Mehta and others (the alleged
Trustees) fraudulently and unlawfully took control of Lilawati
Kirtilal Mehta Medical Trust in the year 2006. Since then, the
Trust's assets and resources have been systematically exploited
through collusive, computerized, and corrupt means. They
trampled purposefully the objectives and responsibilities of the
Trust, and spent the funds of the Trust for their own suits,
leisure and for transactions of questionable legality.
The Hon'ble Supreme Court vide its Order dated
18/08/2023, and vide a Decision of the Assistant Charity
Commissioner dated 14/12/2023, the cheating of the Accused
was exposed and they were removed from their posts. Those
Orders have proved that, they were not the true Trustees but
they were the Thugs cheating by remaining there behind the
Trust. Before their removal, most of the documents of their
mal-transactions have been destroyed by them while leaving
the Trust but some documents could be observed by us.
Wherein I have found serious evidences of misappropriation.
Among these, one document is a photocopy of a cash register
containing handwritten entries of cash disbursements. In the
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said cash register, one such entry reflects a cash payment of
Rs.2.05 Crores to Mr. Sashidhar Jagdeeshan, who is currently
serving as the Chief Executive Officer of HDFC Bank.
My father, Late Kishor Mehta was the Director of a
Company namely Beautiful Diamond Company. The Beautiful
Diamond Company had availed a loan from HDFC Bank. With
reference to the said loan a dispute was going on with HDFC
Bank. While taking advantage of the same, Chetan Mehta and
others in collusion with the CEO of the HDFC Bank namely
Shri. Sashidhar Jagdeeshan, subjected my father to continuous
harassment, mental agony, and unlawful coercion. As a result
of this sustained psychological pressure and unjust treatment,
my father suffered severe emotional distress, ultimately
leading to his untimely death on 20 th May 2024. This tragic
loss has caused irreparable harm and suffering to my family.
The circumstance is partially acknowledged in Paragraph
No.06 of the Court's Order, which also refers to the wrongful
accumulation of wealth by the accused parties. This wealth,
derived through fraudulent means, was not only retained for
personal gain but was also secretly distributed to certain
officials through secret and malicious way.
Upon further investigation into the matter, it came
to light that several illegal transactions were carried out
between the periods of 16/03/2022 to 21/06/2022 under the
directions of the alleged Trustees. The funds of the Trust,
which were meant for charitable and public welfare purposes,
were misappropriated and secretly diverted for personal
enrichment and corrupt activities. This is not only a cheating
but the same is a complete slander to the sacred values and
objectives for which the Trust was established.
Shri Sashidhar Jagdishan, CEO of HDFC Bank,
misused his official position and, in collusion with Chetan
Mehta and others, has taken unfair advantage to himself.
These gains were used by Shri. Sashidhar Jagdishan to initiate
malicious legal suits, engage in fraudulent campaigns, and
exert unlawful pressure on multiple parties. He is not the only
one in it but the same has been done with a pre-planned and
with fraudulent and malicious intent.
In the said fraud, alongwith Shri. Sashidhar
Jagdishan, CEO of the HDFC Bank, the late Alleged Trustee
Shri. Chetan Mehta, Shri. Rashmi Mehta, Shri. Bhavin Mehta,
Shri. Niket Mehta, Shri. Nimesh Seth, Smt. Sushila Mehta and
Shri. Ayushyman Mehta are also been responsible in the same
proportion. During the period of their trusteeship, by
completely and openly flouting the duties, they have entered
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into various illegal financial transactions, which could be
revealed only after dismissing them from their posts. Even
after getting removed from the posts vide legal order, they
illegally continued the representation of the Trust and did
financial transactions without authorized permission. By using
their past authorities they misappropriated the funds of the
Trust and by showing themselves to be fabricated Trustees of
the Trust, used huge amount for themselves.
Due to the so-called past Trustees (the then Alleged
Trustee Shri. Chetan Mehta, Shri. Rashmi Mehta, Shri. Bhavin
Mehta, Shri. Niket Mehta, Shri. Nimet Set, Smt. Sushila Mehta
and Shri. Ayushyman Mehta), the Trust has faced a huge
financial loss. Wherein giving unauthorizedly money in cash to
Shri. Sashidhar Jagdishan is also included. This act is not only
a breach of trust but the same is a criminal conspiracy. The
objective of which was to do fraud with the funds of the Trust.
There are many other entries in the cash diary, apart
from the entries got exposed which are very much required to
take into enquiry. The said entries are the witnesses of secret
transactions. From which all the spokes of mal-transactions
can be exposed.
1) Shri. Sashidhar Jagdishan, Chief Executive
Officer of HDFC Bank, Address-HDFC Bank House, Senapati
Bapat Marg, Lower Parel, Mumbai.
2) Shri. Chetan Mehta, The so-called trustee of
LKMMT, address- The Imperial, North Tower, Apartment 3205,
Tardeo, Mumbai.
3) Shri. Rashmi Mehta, the past so-called
Trustee of LKMMT, address-Usha Kiran, Flat No.24, 12 th floor,
15 Carmicle Road, Mumbai.
4) Shri. Bhavin Mehta, the past so-called Trustee
of LKMMT, address- Usha Kiran, Flat No.24, 12 th floor, 15
Carmicle Road, Mumbai.
5) Shri. Niket Mehta, the past so-called Trustee
of LKMMT, address- Maker Tower L, 9 th floor, Flat No.91,
Cough Parade, Colaba, Mumbai.
6) Shri. Sushila Mehta, the past so-called
Trustee of LKMMT, address- Maker Tower L, 9 th floor, Flat
No.91, Cough Parade, Colaba. Mumbai.
7) Shri. Nimesh Seth, the past so-called Trustee
of LKMMT, address- Swikar Building, First Floor, V. P. Road,
Vileparle (West), Mumbai.
Bhogale wp-3205-2025.odt
8) Shri. Ayushyman Mehta, the past so-called
Trustee of LKMMT, address-The Imperial, North Tower,
Apartment 3205, Tardeo, Mumbai.
Hence the former Alleged Trustee of Leelavati
Kirtilal Mehta Medical Trust Shri. Chetan Mehta, Shri. Rashmi
Mehta, Shri. Bhavin Mehta, Shri. Niket Mehta, Shri. Nimesh
Seth, Smt. Sushita Mehta and Shri. Ayushyman Mehta during
the period from 2006 to 2023, by keeping illegal conrol over
the management of LKMMT, in collision amongst themselves,
by playing fraud with breaching the trust of the Trust as also
for constantly torturing, troubling and for mentally
suppressing my father, by giving an amount of approximately
Rupees Two Crores and five lakhs in cash to Shri. Sashidhar
Jagdishan (The Chief Executive Officer of the HDFC Bank),
thereby misapproprating the funds of Leelavati Kirtilal Mehta
Medical Trust, by not taking the said amount on any legal
record of LKMMT, have played fraud, hence I have a legal
Complaint against Shri. Sashidhar Jagdishan, the Chief
Executive Officer and the former Alleged Trustee of the
Leelavati Kirtilai Mehta Medical Trust Shri. Chetan Mehta,
Shri. Rashmi Mehta, Shri. Bhavin Mehta, Shri. Niket Mehta,
Shri. Nimesh Sheth, Smt. Sushila Mehta and Shri. Ayushyman
Mehta under Sections 406, 409, 420, 34 of the Bharatiya
Nyaya Sanhita."
64. The Trial Court in paragraph Nos.6, 7 and 8 while
allowing the application observed thus :-
"6. It is contended that there was a loan recovery
proceeding going on between one of the company, of which
the father of one of the present trustee was office bearer and
the HDFC Bank, a creditor. The Respondent No.1, is senior
officer of the creditor bank. During this recovery proceeding
the father of one of the present trustee was harassed
physically and mentally, which ultimately resulted in his
death after assuming office applicant found a diary showing
that from time to time several amounts were transferred on
the say of Respondent No.2, Mr. Chetan Mehta to
Respondent No.1. The total amount transferred to those
transactions is about Rs.2.05 crores. The said amount was
paid by Respondent Nos.2 to 8, the erstwhile office bearers
of trust with a sole view to harass the father of one of the
present trustee.
Bhogale wp-3205-2025.odt
7. From the record i.e. contents of the diary it appears
that from time to time amounts were transferred on the say
of Respondent No.2 to Respondent No.1. The allegations are
constituting cognizable offence and supported by affidavit.
Except copies of entries in the diary nothing produced.
Specific query to that effect was made and asked whether
applicant is having any additional evidence in support of the
allegations or not? In this regard it is submitted that
respondents were having control over the trust for
substantial period of time and before handing over the
control of administration respondents destroyed all the
documents. It is also submitted that the document produced
is enough to draw the inference of fraud. To verify and
collect evidence to ascertain the source of those amounts and
how those were transferred to the respondents without any
reason the investigation through police is necessary as
evidence can be collected by the police only.
8. The amount involved is high. As stated above the
allegations are constituting cognizable offences. Regarding
objection raised by concerned police station, Ld. Advocate
for the applicant filed on record copies of First Information
Reports, the investigations in respect of which are pending.
After going through those copies it is noticed that those
allegations are in respect of other matters and the present
allegations are not covered by them. The several other
requirements are also satisfied. In such a situation there is
not much scope except to allow the application to ascertain
the genuineness of the allegations also. It can be said that
all the persons mentioned are responsible for the alleged
acts."
65. Thus, the learned JMFC has observed that from the
contents of the photocopy of a diary it appears that from time to
time amounts were transferred to the officials of the Bank
including the petitioners. The Trial Court further observed that to
verify and collect evidence to ascertain the source of those
amounts and how those were transferred to the petitioners
Bhogale wp-3205-2025.odt
without any reason, the investigation through police is necessary
as evidence can be collected by the police only.
66. Mainly this is the material which forms the basis of the
complaint alleging the offence which the petitioner wants a
thorough investigation to be conducted into. As indicated earlier
according to the respondent No.3 as a result of the pressure
created by the recovery proceedings initiated by the Bank that led
to death of Mr. Kishore Mehta. But this by itself even coupled with
the fact that the respondent No.3 found a photocopy of cash diary
which according to them shows the entries regarding large
payments made by the erstwhile trustees to the officials of the
bank, in our opinion, in the facts and circumstances of the present
case, are not at all sufficient to form the basis for a thorough
investigation. We are more than satisfied that the filing of the
complaint by respondent Nos.3 and 4 is a fallout of the recovery
proceedings initiated by the financial institutions.
67. 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. It is not possible for us to ignore the various orders
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passed by the competent Courts in the course of the recovery
proceedings while coming to this conclusion.
68. In all fairness to learned Senior Advocates for the
petitioners, we must mention that several procedural infirmities
with respect to the complaint before the learned JMFC which,
according to learned Senior Advocates justify quashing, were
raised. However in view of the aforesaid conclusions that we have
reached, we have refrained from dealing with such procedural and
technical submissions advanced.
69. We find that the impugned order amounts to a gross
abuse of the criminal process, being founded on purely civil
background and recovery proceedings that have already attained
finality through orders of the DRT and this Court. The allegations,
even if taken at face value, do not disclose any entrustment or
dishonest inducement--essential ingredients of Sections 406, 409
or 420 of IPC.
70. In our view Section 175(3) of the BNSS confers no
mechanical right to seek registration of an FIR where the
allegations have already been examined and rejected. The
Magistrate failed to appreciate the binding effect of prior judicial
Bhogale wp-3205-2025.odt
orders and the bar against multiplicity of proceedings on identical
facts.
THE UPSHOT OF THE FOREGOING DISCUSSION IS AS
FOLLOWS :-
71. The complaint is a fall out of the recovery proceedings
initiated by the petitioners-financial institutions against the Lilavati
trust. There is serious acrimony, distrust and strained relations to
the core between the erstwhile trustees and present trustees. When
the new trustees took over, several recovery proceedings had
already been initiated. Even today dues to the extent of Rs 65
cores are yet to be recovered. It is the complainant's case that it is
the pressure exerted due to these recovery proceedings that led to
the unfortunate demise of his father. For this the complainant
blames the financial institutions, obviously those in charge.
72. The recovery certificates were issued by the competent
forum viz the DRT, for recovery of the dues in the manner
prescribed by law. Financial institutions are bound to initiate
proceedings for recovery of the loan amounts. In fact, they would
be remiss in due discharge of their duty had they failed to initiate
recovery proceedings. The recovery proceedings did not lead to its
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dismissal. There was no castigation of the financial institutions
seeking recovery. The institutions were thus justified in pushing for
the recovery. The same was contested by the Trust and challenges
have been mounted by the Trust to several orders passed by the
DRT.
73. The demise of the complainant's father undoubtedly is
unfortunate. But the petitioners cannot be blamed for this. The
complainant is holding the petitioners responsible. This impression
of the complainant is personal to him but cannot be a justifiable
reason to trigger a criminal prosecution on the specious plea that a
photocopy of a diary is found by the complainant containing some
entries of payments made to the petitioners.
74. We are interfering at a very nascent stage of investigation,
which as cautioned by the Hon'ble Supreme Court this Court
should be extremely slow with. But a personal vendetta writ large
on the face of proceedings for recovery is something which we
strongly perceive as a reason for interference. Continuance of the
investigation in these facts and circumstances would be nothing
but be an abuse of the process of court. Undoubtedly, when
circumstances justify and the allegations made in the complaint do
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constitute the ingredients of the offence, it definitely calls for a
detailed investigation. But the complaint at the least should appear
bonafide.
75. To dismiss a challenge to a complaint merely on a
mechanical reading while holding that the allegations prima facie
constitute the offence alleged would be in the teeth of the
principles laid down by Their Lordships in Bhajan Lal (supra) and
other decisions referred to herein before. The ripples of the
strained relations between the family members who were and are
managing the affairs of the trust are being felt by the petitioners. It
is in such view of the matter, we have no hesitation even at such a
nascent stage in concluding that this is not a bonafide complaint so
far as the petitioners are concerned. To allow a prosecution of such
a nature to continue in the present facts not only lacks bonafides
but runs the risk of deterring recovery proceedings.
76. We are not expressing any opinion so far as the
allegations made against rest of the accused (erstwhile trustees)
are concerned.
77. Writ Petition No.3205 of 2025 is therefore allowed in
terms of prayer clauses (a) and (b). The allegations against the
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petitioners are by and large similar. Hence for the aforesaid
reasons even Criminal Writ Petition No.3215 of 2025 is allowed in
terms of prayer clauses (a) and (b), Criminal Writ Petition No.3216
of 2025 is allowed in terms of prayer clauses (a) and (b) and
Criminal Writ Petition No.3217 of 2025 is therefore allowed in
terms of prayer clauses (a) and (b).
78. The relief prayed in Criminal Writ Petition Nos.3227 of
2025 and 3313 of 2025 is for transfer of the investigation to the
CBI. We must record that these writ petitions were heard at some
length. We have heard learned counsel and the SPP for CBI.
However, considering that we have quashed the FIR, there is no
question of then entertaining these writ petitions so far as the
petitioners in these writ petitions are concerned. It is significant to
note that the FIRs were registered on 31/05/2025. The Criminal
Writ Petition No.3227 of 2025 was filed on 16/06/2025 and
Criminal Writ Petition No.3313 of 2025 on 17/06/2025. It was
within a period of two weeks from registering the FIRs that the
petitions for transfer of investigation to CBI came to be filed.
We do not find that allegations made are of such nature that the
Economic Offences Wing (EOW) lacks the capacity or does not
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have the necessary wherewithal to investigate the FIRs.
These criminal writ petitions have been filed even before the EOW
could commence the investigation. There is nothing to justify the
transfer of investigation to CBI at such a premature stage. Leaving
the liberty of the petitioners in Criminal Writ Petition Nos.3227 of
2025 and 3313 of 2025 open to file appropriate proceedings at a
later stage if the circumstances so justify, the said criminal writ
petitions are dismissed.
79. In view of the disposal of the Criminal Writ Petitions,
Criminal Interim Application No.3378 of 2025, Criminal Interim
Application No.3377 of 2025 and Criminal Interim Application
(Stamp) No.21717 of 2025 are disposed of.
(N. R. BORKAR, J.) (M. S. KARNIK, J.)
