Bombay High Court rejects Lilavati Trust’s Rs 17 Crore recovery claim for lack of statutory consent

Lilavati Trust

The Bombay High Court has dismissed a Rs.17.2 crore recovery suit filed by the Lilavati Kirtilal Mehta Medical Trust (LKMMT) against former trustee Niket Mehta, ruling that the case was barred under the Maharashtra Public Trusts Act (MPT Act) for lack of mandatory consent from the Charity Commissioner.

Justice Milind N. Jadhav, in an order dated December 3, allowed Mehta’s plea under Order VII Rule 11(d) of the Civil Procedure Code, which permits rejection of plaints not maintainable in law. The court held that the trust failed to comply with Sections 50 and 51 of the MPT Act, which require prior approval for suits involving trustees and public trust property.

Moneycontrol has seen a copy of the order.

The suit, filed in December 2024 by trustee Charu Mehta and others, sought compensation for Mehta’s alleged unauthorized occupation of two trust-owned properties — a 12th-floor flat and an office in Lilavati Hospital — between 2007 and 2015. Plaintiffs claimed Mehta was never validly appointed and termed him a “trespasser” who misused his position for personal gain. They also alleged large-scale financial irregularities by Mehta and former trustees, citing an audit report that flagged misappropriation of Rs.1,700–1,800 crore and ongoing criminal probes.

Senior advocate Pankaj Sawant who represented Niket Mehta argued that the trust’s own pleadings and annexed documents repeatedly acknowledged Mehta as a “permanent trustee” from 2001 to 2023. Letters, official communications, and even contempt petitions addressed him in that capacity. Therefore, the suit fell squarely under Section 50 of the MPT Act, making Charity Commissioner’s consent mandatory.

Senior advocate Atul Damle counsel for the Trust countered that Mehta was an illegally appointed trustee and a rank trespasser, citing a 2023 order by the Assistant Charity Commissioner rejecting his change report. He argued that suits against trespassers do not require Charity Commissioner’s approval and pointed to Supreme Court orders directing Mehta to vacate the premises and pay compensation.

Justice Jadhav noted that the trust’s own documents described Mehta as a trustee for over 15 years, undermining its attempt to label him a trespasser. “A party cannot treat someone as a trustee for more than 15 years and subsequently re-label him as a trespasser merely to circumvent statutory requirements,” the judgment said. The court concluded that the cause of action arose from Mehta’s position as trustee, making Charity Commissioner’s consent a prerequisite. Without it, the suit was barred and stood rejected.

LKMMT runs one the most famous Lilavati Hospital in the upscale Bandra locality in Mumbai. The family feud between the current and erstwhile members of LKMMT had turned ugly, with allegations and counter-allegations. LKMMT alleges financial irregularities and fraud allegations under previous trustees, which have led to a forensic audit and legal complaints.