Bombay HC Refuses Injunction to Lilavati Trust Against HDFC Bank's Defamation Statements, Awards Rs 5 Lakh Costs
Justice Somasekhar Sundaresan dismissed the interim injunction application, holding HDFC Bank's statements about loan defaults were factually grounded, bona fide, and in public interest.
The Bombay High Court has refused to injunct HDFC Bank from making statements about alleged loan defaults by the Mehta family, dismissing an interim application filed by Lilavati Kirtilal Mehta Trust and its trustee Prashant Kishor Mehta. Justice Somasekhar Sundaresan, sitting singly in the Ordinary Original Civil Jurisdiction, found that the statements published by HDFC Bank were factually accurate, based on strong material, and constituted a bona fide response to a media campaign launched against the bank. The court also found that the balance of convenience lay firmly with HDFC Bank, and that gagging the bank would expose it to continued attacks without any ability to respond. Costs of Rs 5,00,000 were imposed on the plaintiffs, payable to HDFC Bank within six weeks.
The Suit and the Injunction Application
Lilavati Kirtilal Mehta Trust (“Lilavati Trust”) and Prashant Kishor Mehta (“Prashant”) filed Suit No. 160 of 2025 before the Bombay High Court alleging defamation by HDFC Bank Limited and its executives — Sashidhar Jagdishan (Managing Director and CEO), an unnamed official spokesperson, and Ms. Madhu Chhibber (Head of Corporate Communications). The suit also named X Corp. (formerly Twitter) and Meta Platforms Inc. (Facebook and Instagram) as defendants, on the basis that the allegedly defamatory content was posted on their platforms.
The suit sought a permanent injunction restraining the defendants from vilifying, maligning, or tarnishing the reputation of the plaintiffs through any medium, directions to remove the offending content from HDFC Bank's website and social media platforms, a public apology, and damages of Rs 1,000 Crores for loss of reputation, loss of financial contribution to Lilavati Trust, and mental agony.
Interim Application No. 3095 of 2025 (“IA 3095”) sought interim reliefs pending the suit's disposal. Given the length and scope of submissions, the parties consented to IA 3095 being taken up for final hearing on the question of interim relief, rather than ad interim relief.
The Statements Alleged to Be Defamatory
Senior Advocate Mr. Devadatt Kamat, appearing for the plaintiffs, identified three categories of statements as defamatory. An email dated 6 June 2025 sent by HDFC Bank to the Free Press Journal stated that Prashant, claiming to be a trustee of Lilavati Trust, had initiated false and malicious prosecution against the bank's MD and CEO to thwart recovery of over Rs 65 crores in outstanding loans pertaining to his family business “Beautiful Diamonds, now known as Splendor Gems.”
A statement dated 7 June 2025 published on the HDFC Bank website stated that the trustee Prashant Mehta and his family members owed substantial amounts to HDFC Bank which were never repaid, and that recovery and enforcement actions had been taken by the bank over two decades, with Prashant and his family launching numerous vexatious legal actions at every stage.
A press release dated 8 June 2025, published by various media platforms, repeated the substance of these allegations. An article in the Indian Express attributed statements to HDFC Bank about the bank commencing legal action against Lilavati Trust over a loan default issue.
Mr. Kamat argued that an ordinary reader would understand these statements to mean that Lilavati Trust and Prashant had personally borrowed money from HDFC Bank and defaulted. He submitted that this was patently false: neither Lilavati Trust nor Prashant had borrowed any funds from HDFC Bank. Prashant had been drawn into recovery proceedings only as a legal representative of his late father Kishor Mehta, and his liability — if any — was limited to the extent of the estate inherited from Kishor, a question yet to be adjudicated by the Debt Recovery Tribunal (“DRT”). The statements, he argued, were “half-truths” structured to inflict reputational injury.
Mr. Kamat also relied on the Division Bench judgment in Shree Maheshwar Hydel Power Corporation Ltd. v. Chitroopa Patil & Anr. — (2024) 1 Mah. L.J. 382 — to submit that under Indian law, a mere plea of justification is not sufficient to deny interim relief in a defamation action. The defendants must additionally show that the statements were bona fide, in public interest, and based on material whose veracity can be tested.
He further argued, relying on Kunwar Radha Krishen Pratap Singh v. H.S. Bates — 1950 SCC Online Allahabad 15 — that retaliatory defamation is not a permissible defence. Even if HDFC Bank felt defamed by Prashant's press conference, the bank's remedy was to file a defamation suit, not to publish statements defaming the plaintiffs.
HDFC Bank's Defence: Factual Accuracy and Bona Fide Clarification
Senior Advocate Mr. Kevic Setalvad, appearing for HDFC Bank, countered that every statement in the Subject Statements was factually accurate and had to be read in the full context of the factual matrix.
He traced the history of the recovery proceedings. By an order dated 26 October 2004, the DRT had declared Kishor liable in recovery proceedings. That order was never challenged and attained finality. A Recovery Officer's order dated 5 February 2020 found that as of 26 February 2018, the amount recoverable had grown to approximately Rs 184.86 Crores. The Recovery Officer found that Kishor, his sons Rajesh and Rajiv, and associated corporate debtors — Beautiful Diamonds Ltd. and Beautiful Jewellers Pvt. Ltd. — were men of means who had dishonestly incorporated companies and made transfers in violation of the Second Schedule of the Income Tax Act, 1961, applicable to certificate proceedings under the Recovery of Debts and Bankruptcy Act, 1993 (“RDB Act”). Arrest warrants were issued against Kishor, Rajesh and Rajiv.
After Kishor's demise in May 2024, the DRT issued a recovery certificate on 5 July 2024 bringing Prashant and his mother Charu Mehta on record as legal heirs. Mr. Setalvad submitted that on the very same day — 5 July 2024 — Lilavati Trust filed a criminal complaint under Section 156(3) of the Criminal Procedure Code, 1973 before the Bandra Metropolitan Magistrate, seeking directions to register an FIR against HDFC Bank officials for culpable homicide not amounting to murder, criminal conspiracy, and related offences, alleging that the mental anguish caused by HDFC Bank's actions led to Kishor's death on 20 May 2024.
The Magistrate declined to take cognizance by an order dated 3 August 2024, holding that HDFC Bank's actions were legitimately taken in prosecution of legitimate recovery efforts and could not reasonably be viewed as designed to harass Kishor to the point of causing his death. Lilavati Trust challenged this order by a revision application under Section 442(2) of the Bharatiya Nagarik Suraksha Sanhita, 2023.
Mr. Setalvad catalogued a series of writ petitions filed by the Mehta family challenging DRT orders — WP 132 of 2023, WP 1760 of 2024, and WP 2830 of 2024 — all of which were either dismissed or resulted in no relief. In WP 1760, a Division Bench directed a deposit of 25% of the debt due as a condition for entertaining the petition; no deposit was made and no relief was granted. WP 2830 was dismissed at the threshold for being filed with a delay of 20 years and without availing the alternate remedy under the RDB Act.
Mr. Setalvad also pointed out that proceedings had been initiated before the Maharashtra State Minority Commission invoking Kishor's identity as a Jain, and that a former Commissioner of Police who later joined Lilavati Trust had addressed a press conference against HDFC Bank. He submitted that it was Prashant who had used the platform of Lilavati Trust and its social media handles to launch a campaign against HDFC Bank, and the bank's statements were a legitimate and fair response to that campaign.
How the Court Reasoned
Justice Sundaresan applied the standard from Shree Maheshwar: at the interim stage in India, the court is entitled to scrutinise the material tendered by the defendants to test its veracity, and to assess whether the statements were bona fide and in public interest. A mere plea of justification is not sufficient to deny interim relief, but the defendants must demonstrate that the statements were based on sufficient material whose truth can be tested.
Applying that standard, the court found that the Subject Statements were factually accurate when read against the record. The DRT's 2004 order declaring Kishor liable had attained finality. The Recovery Officer's orders of 2020 and 2023 contained quasi-judicial findings that the Mehta family were men of means who had made dishonest transfers to frustrate recovery. The DRT's order of 5 July 2024 had brought Prashant and Charu on record as legal heirs, and a recovery certificate had been issued against them.
The court rejected the plaintiffs' argument that the statements were defamatory because Prashant's liability as a legal heir had not yet been finally adjudicated by the DRT. Justice Sundaresan held that the nuance — that Prashant owed money only as a legal representative and only to the extent of the estate — did not turn the needle in favour of granting an injunction. The Subject Statements, seen holistically, could not be faulted at the prima facie stage.
On the question of retaliatory defamation, the court found that the Subject Statements did not constitute retaliatory defamation. Whether to respond to the plaintiffs' media campaign through litigation or through clarificatory statements was a matter of autonomous choice for HDFC Bank. The fact that the plaintiffs had chosen to file a defamation suit in response was not relevant to the consideration of interim relief.
The court also addressed the balance of convenience and the question of irreparable harm. It held that grave and irreparable harm would be occasioned to the defendants if an injunction were granted, because the plaintiffs had an established track record of running a media campaign against HDFC Bank and its officials. Gagging HDFC Bank would expose it to continued attacks without any ability to respond. Gagging both sides would, in the court's view, be contrary to the constitutional default position of free speech that is truthful, because it would effectively gag HDFC Bank through the backdoor.
The court noted that what was already in the public domain about the plaintiffs — drawn from judicial and quasi-judicial findings — pointed to it being convenient not to interfere with HDFC Bank's ability to state the factual position. If the prima facie view were to change upon trial, a permanent injunction could always be issued at the final disposal of the suit.
Outcome
IA 3095 was dismissed. No interim injunction was granted to the plaintiffs. Justice Sundaresan observed that each and every measure to derail the recovery proceedings had been repelled by courts, yet there had effectively been no recovery despite the rule of law working its course, and that IA 3095 was one more in this long chain of proceedings.
Costs of Rs 5,00,000 were directed to be paid by the plaintiffs to HDFC Bank within six weeks of the upload of the judgment on the court's website. The court directed that all actions pursuant to the order be taken upon receipt of a downloaded copy from the court's website.