The Bombay High Court has dismissed a ₹1,000 crore defamation suit filed by the Lilavati Trust against HDFC Bank and its CEO Sashidhar Jagdishan. The Trust had sought an interim "gag order" to prevent the bank from making public statements about a decades-old loan recovery dispute. The court not only rejected the plea but imposed a ₹5 lakh fine on the Trust for the attempt.
The court explicitly characterized the Trust's legal strategy as a "spree of frivolous litigation" designed to obstruct HDFC Bank's legitimate recovery proceedings. Judges found that the bank's statements were factually accurate and represented a lawful defense of its recovery process, affirming that lenders have the right to speak publicly about their recovery actions without fear of multi-crore defamation suits.
This ruling follows another Bombay High Court decision last month that quashed a bribery FIR filed by the same Trust against the HDFC CEO, which the court labeled a "counterblast" to the bank's collection efforts. Together, these judgments signal judicial pushback against weaponized litigation tactics.
For years, wealthy corporate defaulters have used criminal complaints and defamation suits as intimidation tools against bank executives to stall recovery proceedings. The court's latest decision explicitly rejects this pattern, stating that the judiciary will not allow the legal system to be abused as a shield against legitimate debt recovery.
