When the matter came up for hearing before a bench of Justices A S Gadkari and Rajesh S Patil, Justice Patil recused himself from hearing the matter after which it was mentioned before a division bench led by Justice Sarang V Kotwal. Justice Kotwal too recused himself from hearing the matter, noting that he had earlier represented one of the trustees. The petitioner will now have to approach the high court administration for assignment of another bench.

The HDFC Bank CEO, through senior advocate Amit Desai, claimed that the FIR was baseless and malicious. Desai argued that the FIR was a “retaliatory move” due to HDFC Bank’s recovery proceedings initiated against Splendour Gems Limited, a company owned by Mehta family, which had till May 31 defaulted on loans to the tune of Rs. 65.22 crore. He said that the complainant is using the “facade of Lilavati Trust to take action against the petitioner.”

Jagdishan sought direction from court to quash the FIR filed against him along with setting aside of the magistrate court order that initiated the probe. Pending hearing of the plea, he has sought stay on the inquiry against him and that there should not be no coercive action including the filing of chargesheet against him, failing which he will “suffer grave loss and irreparable injury.”

On May 29, the magistrate court had ordered the Bandra police to register offences punishable under sections 406, 409 (criminal breach of trust) and 420 (cheating) of the Indian Penal Code (IPC) and had directed the police to probe the matter as per section 175 (3) of the Bhartiya Nagrik Suraksha Sanhita (BNSS). The Bandra police registered the FIR on May 31.

The trust, through its authorised representative Prashant Mehta, had filed a complaint contending that there was a loan recovery proceeding going on with a company, of which the father of one of the present trustees was office-bearer and the HDFC Bank, a creditor.

The complaint claimed that during the recovery proceedings, the father of the said trustee was harassed physically and mentally, which resulted in his death. After assuming office, Prashant allegedly found a diary showing that from time to time several amounts were transferred on Chetan Mehta’s directions to Jagdishan, totalling Rs 2.05 crore. Prashant claimed that the said amount was paid by Chetan Mehta and six others who were erstwhile office bearers of the trust, with a sole view to harass the father of one of the trustees.

Judicial Magistrate First Class (JMFC) Komalsing Rajput, in the May 29 order, noted the contents of the diary showed that amounts were transferred from time to time, that the allegations constituted cognizable offences and the amount involved was “high”.

The magistrate noted that to verify and collect evidence to ascertain the source of amounts and how they were transferred without any reason, a police probe was necessary and hence ordered a probe by the Bandra police.

However, Jagdishan, in his plea, claimed that the magistrate’s order was “self contradictory and flawed.” The plea stated,  Despite noting that except for diary entries, no additional evidence was produced, and the complainant Prashant Mehta was unable to furnish further proof, the. Magistrate still proceeded to direct the investigation based solely on the affidavit.” Jagdishan said the diary and xerox copies of selective cash records was not sufficient and cogent evidence to take cognizance of the offence and the magistrate’s actions were “deplorable.”

The Bandra police had registered another FIR on May 31 against Chetan Mehta, M/s Phoenix ARC Private Ltd and others for embezzlement of trust funds to the tune of Rs 2.25 crore.

Phoenix ARC, along with accused persons Keki Elavia and Venkatu Srinivasan have also approached the high court seeking quashing of the embezzlement FIR against them.

The high court will hear the pleas in due course.