Bombay High Court Sides With HDFC Bank In Lilavati Trust Defamation Battle

The Bombay High Court on Tuesday dismissed an interim application by the Lilavati Kirtilal Mehta Trust seeking to restrain HDFC Bank and its executives from making public statements about the trust, finding no prima facie case of defamation and ordering the trust to pay ₹5 lakh in costs to the bank.

Justice Somasekhar Sundaresan refused to grant any of the three reliefs sought by the trust: a restraint on further statements, removal of existing press releases from the bank's website and social media, and a public apology from HDFC Bank.

The Background

The Lilavati Trust and trustee Prashant Mehta filed a ₹1,000 crore defamation suit against HDFC Bank, its Managing Director and Chief Executive Sashidhar Jagdishan and others, alleging that the bank's public statements falsely portrayed the trust and Mehta as wilful defaulters and vexatious litigants.

Mehta argued he had never personally borrowed from HDFC Bank and that his liability as legal heir of his late father, Kishor Mehta, was limited to an inherited estate.

What The Court Found

Justice Sundaresan traced the recovery proceedings to a 2004 Debt Recovery Tribunal order and found that the three core public assertions of the bank were supported by material on record:

• Substantial sums were due from the Mehta family.

• Recovery efforts had continued for approximately 20 years.

• Numerous legal proceedings had been filed in the process.

It noted that the Lilavati Trust had itself run a media and legal campaign against HDFC Bank, using its letterhead, social media handles and filing a criminal complaint accusing bank executives of culpable homicide.

In that context, restraining the bank from responding would cause greater harm than allowing it to continue defending its position publicly.

"Grave and irreparable harm would be occasioned to the bank if an intervention is made in favour of the Trust, who have an established track record of running a media campaign against HDFC Bank and its officials," the court observed.

The court also held that a bank has a heightened duty of transparency to depositors and markets, making public clarification a matter of public interest.

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What Comes Next

The defamation suit will proceed to full trial. A permanent injunction remains available as a remedy if the trust proves its case at that stage. The trust has been directed to deposit ₹5 lakh in costs within six weeks.

The ruling follows the Bombay High Court quashing a first information report filed by the trust against HDFC Bank's chief executive in May 2026, which the court at that time described as an abuse of the process of law arising from recovery proceedings.

Sources:

Bar and Bench

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