The Lilavati Kirtilal Mehta Medical Trust (LKMM Trust), which manages Mumbai's Lilavati Hospital, and HDFC Bank are locked in a dispute, with the Trust refuting any outstanding dues to the bank. HDFC Bank, on the other hand, is preparing to take legal action to recover the funds it claims are owed. Here's a breakdown of the situation:

The Trust's Claims:

The LKMM Trust has launched a strong defense, asserting that it owes no money to HDFC Bank. They claim that neither the trust nor its permanent trustee, Prashant Kishor Mehta, has ever borrowed any funds from HDFC Bank, nor are they connected to Splendour Gems Ltd, the company at the center of the alleged debt. The Trust has gone further, alleging that HDFC Bank MD and CEO Sashidhar Jagdishan accepted a ₹2.05 crore bribe to help the Chetan Mehta group maintain illegal control of the LKMM Trust and accused him of receiving unaccounted cash for "harassing" a trustee's father. The Trust has initiated civil and criminal defamation proceedings against the MD and CEO for allegedly causing over ₹1,000 crore in losses. The Trust has urged the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Ministry of Finance to take immediate action, including the suspension of Jagdishan, a forensic audit of transactions between HDFC Bank and the Trust, and a bar on Jagdishan from holding office in any SEBI-regulated entity.

HDFC Bank's Stance:

HDFC Bank has vehemently denied the Trust's allegations, calling them "malicious and baseless" and a gross misuse of the legal process. The bank asserts that the Mehta family, through Splendour Gems Limited, defaulted on loan facilities granted in 1995, with outstanding dues, including interest, amounting to approximately ₹65.22 crore as of May 31, 2025. The bank states that despite a recovery certificate issued by the Debts Recovery Tribunal in 2004 and subsequent enforcement actions, the dues remain unpaid. HDFC Bank believes the Trust's actions are retaliatory and intended to obstruct legitimate recovery proceedings. The bank has vowed to pursue all lawful remedies to recover public funds and address what it sees as retaliatory actions by the Mehta family and to defend the reputation and integrity of HDFC Bank, its directors, and employees.

The Allegations and Counter-Allegations:

The LKMM Trust has filed an FIR against Sashidhar Jagdishan, alleging serious financial fraud, criminal conspiracy, abuse of fiduciary position, evidence tampering, and obstruction of justice. They claim Jagdishan received ₹2.05 crore to harass the father of a current trustee, documented in a handwritten diary. The Trust has also pointed to three earlier FIRs, alleging misappropriation of funds, siphoning off money under the guise of legal fees, and unauthorized procurement of medical equipment.

HDFC Bank counters that these allegations are a response to ongoing recovery proceedings and are retaliatory. They highlight that the Mehta family has initiated multiple legal actions and complaints against the bank and its senior officials, all of which have been dismissed or are under legal challenge.

The Underlying Loan Dispute:

The core of the dispute appears to stem from a loan taken by Splendour Gems Limited, a company owned by the Mehta family, in 1995. HDFC Bank claims the company defaulted on these loan facilities in 2001. The bank has been trying to recover the dues, which have now grown to over ₹65 crore, for over two decades. The Lilavati Trust insists that they are not connected to Splendour Gems Ltd, and therefore not liable for the company’s debts.

What’s Next?

HDFC Bank has stated it will pursue all available legal avenues to recover the outstanding dues. This likely means further court battles and potentially more FIRs. The Lilavati Trust has indicated it will continue to fight the bank's claims and pursue its allegations of fraud against Jagdishan. The outcome of this dispute remains to be seen, but it has already escalated into a major legal and reputational challenge for both the Lilavati Trust and HDFC Bank.