A division bench of justices MS Karnik and SM Modak directed the Lilavati Kirtilal Mehta Medical Trust to file an undertaking by April 21, clarifying that the money will be used exclusively for its lawful purpose, that it will indemnify the bank and be responsible if any claim is made in connection with the FD. It directed the bank to encash the FD along with the accrued interest into the trust’s Union Bank of India account within three days of filing the undertaking.
The trust had approached the high court last year, seeking the encashment of its entire fixed deposit balance. According to the petition, the deposit lying with the Bank matured on June 6, 2024. Subsequently, the trust requested that the bank credit the FD amount to its Union Bank of India account. However, in July 2024, the bank allegedly sought some additional documents from the trust, including an order from the joint charity commissioner confirming trusteeship, citing an ongoing dispute among the trustees.
The dispute concerns a decades-long power struggle between factions of the founder’s family over the trust that manages the premier multi-speciality hospital in Bandra West. It involves allegations of a ₹1,500 crore financial scam, black magic, and several legal cases involving family members.
During the hearing, the bank’s counsel submitted that if the FD amounts are transferred to the trust’s accounts without clarity and later any claims are made by any of the trustees, “it would cause great prejudice to the bank”.
The court, however, rejected the bank’s contentions, observing that the amount was deposited in the trust’s name. Therefore, it said, the maturity amount, along with the accrued interest, has to be encashed into the trust’s account.
“That there exists a trusteeship dispute is hardly of any relevance,” the bench stated. It clarified that Charu K Mehta, being a permanent trustee for life, is duly authorised to represent and act on behalf of the trust.
“If the trust is desirous of encashing the FD and transfer the proceeds thereby to its Union Bank of India account, we see no reason why such a course should be objected to by the Bank”, the court concluded, while disposing of the petition.
