In relief to Lilavati trust, Bombay HC directs IndusInd Bank to encash Rs 65.68 crore FD, transfer it to Union Bank

Joshi said IndusInd Bank repeatedly sought documents and, eventually, in July 2024, demanded an order from the joint charity commissioner confirming trusteeship, citing an ongoing dispute among trustees and the risk of potential claims against the bank if funds were released.

Joshi claimed the trust replied that such an order was unnecessary and reiterated the trustees’ right as per the trust deed. However, the bank reiterated its demand for the joint charity commissioner’s order, subsequently prompting the trust to approach the high court.

Advocate Rahul Karnik, appearing for IndusInd Bank, informed the bench that it sought the charity authorities’ order considering the dispute among the trustees pending with the said authority and that the amount was therefore not credited to the trust’s account.

Joshi further submitted that the trust would file an undertaking stating the Union Bank account is in the name of and belongs solely to the trust.

The undertaking, to be filed by April 21, will also state that Charu K Mehta is a permanent trustee for life under the trust deed and is duly authorised to give instructions on behalf of the trust.

A further assurance will be given that the proceeds of the transfer “shall be utilised exclusively for the lawful purposes of the Trust or reinvested with other banks in terms of the Trust Deed for the purposes of the Trust”.

“Further, the undertaking will also contain a clause that the Petitioner Medical Trust would indemnify the IndusInd Bank and shall be responsible if any claim is made so far as the said FD is concerned,” the high court noted.

The bench then disposed of the plea and directed IndusInd Bank to encash the FD together with accrued interest (less permissible deductions) into the trust’s Union Bank account within three days from the date the trust files the undertaking.