Bombay High Court Quashes FIR Against HDFC Bank CEO In Lilavati Trust Recovery Dispute

In Sashidhar Jagdishan v. State of Maharashtra & Ors., the Bombay High Court quashed FIRs registered against HDFC Bank Managing Director and CEO Sashidhar Jagdishan and officials of Phoenix ARC Private Limited, holding that the criminal proceedings arose from a long-standing debt recovery dispute and did not disclose the ingredients of cognizable offences.

The Division Bench of Justice M.S. Karnik and Justice N.R. Borkar observed that the allegations appeared closely connected to recovery proceedings which had already attained finality before competent forums, including the Debts Recovery Tribunal and the High Court.

The dispute originated from loans granted in 1995 by a consortium of banks to Splendour Gems Limited, a company associated with the complainant’s family. After repeated defaults, recovery proceedings were initiated and recovery certificates were issued in favour of the banks. The litigation continued for several years, including proceedings against guarantors. Following the death of Kishore Mehta in 2024, the complainant alleged that coercive recovery pressure had contributed to his father’s death and relied upon a photocopy of a cash diary to claim that illegal payments had been made to bank officials and trustees.

The Court noted that earlier representations made before authorities, including the RBI and other statutory bodies, had not resulted in action. It further observed that the allegations in the FIR did not prima facie establish dishonest inducement, entrustment, or criminal breach of trust under the IPC. Referring to the principles laid down in State of Haryana v. Bhajan Lal, the Bench held that continuation of the investigation against the petitioners would not be justified in the facts of the case and accordingly set aside the FIRs.