The Bombay High Court has refused to issue an interim order to prevent HDFC Bank and its senior executives from making statements that the Lilavati Kirtilal Mehta Trust claims are defamatory. This decision came amidst a ₹1,000-crore defamation lawsuit filed by the Lilavati Trust against the bank. The Trust had sought a court order to stop HDFC from making further statements, which it alleges portray the Trust and its trustee, Prashant Mehta, in a negative light.
Justice Somasekhar Sundaresan, presiding over the matter, denied the Trust’s interim application, emphasizing that such an intervention could lead to significant harm to HDFC Bank. The judge noted that the Trust has a history of running media campaigns against the bank and its officials. The court found insufficient evidence to suggest that HDFC’s statements were defamatory, stating, “The Plaintiffs have not made out a strong prima facie case against HDFC Bank to hold that the Subject Statements were defamatory in character … The balance of convenience lies in HDFC Bank’s favor.”
The crux of the Trust’s complaint was that HDFC had issued media statements incorrectly labeling trustee Prashant Mehta and his family as willful defaulters and vexatious litigants. The Trust had requested the court to direct HDFC to cease making defamatory statements, remove prior press releases from its website and social media, and issue a public apology. Justice Sundaresan dismissed these requests and ordered the Trust to pay ₹5 lakh to HDFC Bank as costs within six weeks.
Further, the court censured Prashant Mehta for filing numerous frivolous proceedings against the bank’s loan recovery efforts. The judge observed, “It is apparent that each and every measure to derail the recovery has been repelled by Courts and yet there has effectively been no recovery at all despite the rule of law working its course. (This) IA is one more in this long chain of proceedings.”
The allegedly defamatory statements included media releases in which HDFC claimed that Mehta and his family owed substantial sums and had instigated numerous frivolous lawsuits over two decades. Mehta countered these claims by asserting that he had not personally borrowed from HDFC and that any liability was confined to his inherited estate from his late father, Kishor Mehta.
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Justice Sundaresan traced the history of the recovery proceedings, which date back to a 2004 Debt Recovery Tribunal order, recovery certificates, attachment and arrest directions, and several failed writ petitions. Based on these records, the court supported HDFC’s assertions that (i) significant sums remained unpaid, (ii) recovery efforts have spanned nearly 20 years, and (iii) numerous vexatious litigations were initiated, were factually substantiated.
The court acknowledged HDFC’s stance that its statements were made in good faith to counter an ongoing media campaign against the bank and its officials, orchestrated by the Lilavati Trust. The court highlighted the bank’s duty to maintain transparency with its depositors and the public, noting, “Given a bank’s heightened duty of transparency to depositors and markets, clarifying its position in such circumstances was in the public interest.”
The judge also framed the dispute within the context of free speech, pointing out the Trust’s aggressive use of media and legal avenues, including filing a criminal complaint accusing the bank’s officials of culpable homicide. In this context, the court found it unreasonable to expect HDFC to remain silent, remarking, “Gagging HDFC Bank would expose them to the risk of being unable to respond to continued attacks by the Trust.”
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The court concluded that should a trial find the statements defamatory, a permanent injunction could be issued at that stage. Representing the Lilavati Trust were senior advocate Devadatt Kamat and a team of legal professionals, while HDFC Bank was represented by senior advocates Kevic Setalvad and Virag Tulzapurkar, along with their legal team.
