Supreme Court allows probe into Lilavati Trust's financial irregularities

The Supreme Court has allowed Maharashtra Police to continue their investigation into financial irregularities related to Lilavati Trust, dismissing a stay by the Bombay High Court

The Supreme Court on Monday allowed Maharashtra Police to continue their investigation into financial irregularities related to Lilavati Kirtilal Mehta Medical Trust.

 

Lilavati Kirtilal Mehta Medical Trust runs Mumbai’s Lilavati Hospital.

 

Justices PS Narasimha and AS Chandurkar stayed an order of the Bombay High Court preventing the investigation into the alleged financial irregularities related to the Trust.

 

The bench heard an appeal filed by the Trust challenging the High Court’s July 4 interim stay on a Judicial Magistrate’s order. The order had led to the registration of an FIR and the launch of a probe by the Economic Offences Wing (EOW) of Maharashtra Police.

 

 

The Trust informed the apex court that the High Court order was passed without informing either the complainant or the EOW. The State’s Public Prosecutor was not served with the plea at the time of the hearing, the Trust said.

 

The petitioners told the court that in 2005, former trustees of the Trust allegedly entered into irregular and overpriced procurement deals with related vendors, resulting in inflated purchases of medical and surgical supplies amounting to over ₹1,243 crore. The audits reportedly flagged manipulation in pricing, inventory irregularities, and forged documents related to these transactions.

 

An FIR was registered against the former trustees. They approached the Bombay High Court to quash the FIR. On July 4, the High Court passed an interim stay on the probe, after which the matter was taken up by the Supreme Court.

 

HDFC Bank MD

 

On July 4, the Supreme Court had declined to quash an FIR lodged against HDFC Bank’s managing director and chief executive, Sashidhar Jagdishan, by the Lilavati Kirtilal Mehta Medical Trust, which runs Mumbai’s Lilavati Hospital.

 

Jagdishan had moved the Supreme Court after three Bombay High Court judges recused themselves from hearing the matter.

 

The Lilavati Kirtilal Mehta Medical Trust (LKMM Trust) has accused Jagdishan of financial misconduct and undue influence over the hospital’s governance. The dispute between the Trust and the bank escalated in June when the Trust filed a ₹1,000 crore civil defamation suit against Jagdishan.

 

The complaint alleges that members of the Chetan Mehta Group paid ₹2.05 crore to Jagdishan in return for assistance in retaining control over the Trust. The amount was allegedly part of a larger scheme to influence the functioning of the hospital and misuse his corporate position.

 

Additionally, the Trust claimed that an offer of ₹1.5 crore was made to hospital staff, disguised as part of a corporate social responsibility initiative. It accused Jagdishan of interfering in the internal affairs of a charitable institution using his authority as the head of a major private sector bank.

 

The FIR was registered at the Bandra police station following an application filed by the Trust. Jagdishan faces charges including cheating, criminal breach of trust, and those applicable to a public servant.