Supreme Court Stays Bombay HC Order Restraining Probe Into Alleged Misappropriation Of ₹1243 Crore At Mumbai's Lilavati Trust

The Supreme Court today stayed an ex-parte interim order of the Bombay High Court that had restrained investigation into alleged cheating and misappropriation of funds to the tune of Rs. 1243 Crores at the Lilavati Kirtilal Mehta Medical Trust, which runs Mumbai's Lilavati Hospital.

A bench of Justice PS Narasimha and Justice AS Chandurkar issued notice to in a special leave petition filed by the Trust against the Bombay High Court's 4 July 2025 stay order.

The Lilavati Trust had approached the Judicial Magistrate accusing its former trustees of siphoning off its funds. The Judicial Magistrate's order on 28 February 2025 directed the Economic Offences Wing (EOW) of Maharashtra Police to register an FIR under Sections 403, 406, 409, 420, 465, 467, 471 and 474 read with Section 34 of IPC, and investigate the allegations.

“The amount involved is huge. The trust funds were alleged to be misappropriated, as such allegations are very serious. The facts pleaded in this application and documents, collectively leads to inference that cognizable offences has been transpired”, the Judicial Magistrate had observed.

The accused challenged this order before the High Court which issued notice returnable on 22 August 2025 and passed the interim stay till the returnable date. The Trust challenged this order before the Supreme Court in the present case.

The FIR was registered on 6 March 2025 pursuant to the order passed by the Judicial Magistrate. The Magistrate's order was passed on an application filed by the Trust under Section 175(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), supported by forensic audit reports. The Trust alleged that its former trustees had committed cognizable offences amounting to fraud and misappropriation of funds totalling ₹1243,09,92,597.

According to the application, there had been a long-standing legal dispute between the current and erstwhile trustees regarding the control of the Trust. The present office bearers assumed charge following a Supreme Court order dated 18 September 2023 and thereafter initiated a forensic audit of the accounts and transactions through Chetan Dalal Investigation and Management Services Private Limited.

According to the Trust, the forensic reports revealed irregularities in procurement processes and manipulation of accounts. The reports claimed that goods were either not supplied or billed at inflated prices, domain names and email IDs were created to mask transactions, agreements were forged, and due procedure was not followed in appointing vendors.

The respondents named in the application include former trustees and associated individuals who were allegedly involved in managing the related vendor companies. The Trust alleged that these entities siphoned off large amounts of money in violation of standard operating procedures. Further, the former trustees while leaving office allegedly destroyed the evidence of the offence.

The Magistrate noted that the complaint fulfilled the basic requirements under BNSS, that the allegations were of a cognizable nature, and that the Trust had first approached the police but no action had been taken. The Court directed the Bandra Police Station to register an FIR and to conduct an investigation under Section 175(3) of BNSS.

Senior Advocates Abhishek Manu Singhvi, Mukul Rohatgi and Devadatt Kamat, along with advocates Utsav Trivedi, Manini Roy, Monish Bhatia and Piyush Tiwari appeared for the Lilavati Kirtilal Mehta Medical Trust.

Case no. – SLP(Crl) No. 10513-10514/2025 Diary No. 38204 / 2025

Case Title – Lilavati Kirtilal Mehta Medical Trust v. State of Maharashtra