Supreme Court lifts Bombay High Court stay on probe into alleged irregularities at Lilavati Hospital

The Supreme Court on Monday stayed an ex-parte order of the Bombay High Court which had restrained investigation into alleged financial irregularities involving the Lilavati Kirtilal Mehta Medical Trust, which runs Mumbai’s Lilavati Hospital [Lilavati Kirtilal Mehta Medical Trust Vs State of Maharashtra]..The order was passed by a bench of Justices PS Narasimha and AS Chandurkar an appeal filed by the Trust challenging the High Court’s July 4 interim stay on a Judicial Magistrate’s directive that had led to the registration of an FIR and initiation of a probe by the Economic Offences Wing (EOW) of Maharashtra Police..According to the petitioners, the scam dates back to 2005 when former trustees of the Trust allegedly entered into irregular and overpriced procurement deals with related vendors. These transactions, spanning nearly two decades, resulted in inflated purchases of medical and surgical supplies, equipment, and pharmaceuticals worth over ₹1,243 crore. The audits reportedly flagged manipulation in pricing, inventory irregularities, and forged supporting documents.The individuals named as accused include former trustees Chetan Mehta, Niket Mehta, Rashmi Mehta, Bhavin Mehta, and others, as well as directors of Akna Medical and its affiliate vendors. The forensic audit pegged purchases from Akna Medical and its associates alone at over ₹1,200 crore..An FIR was registered on March 6 pursuant to a detailed order passed by the Judicial Magistrate, 12th Court, Bandra, on February 28. The Magistrate had acted on a complaint supported by forensic audit reports and employee testimonies, alleging unlawful procurement transactions and fund mismanagement by former trustees of the Trust and associated private vendors. The former trustees approached the Bombay High Court to quash the FIR. .On July 4, the High Court passed an interim stay on the probe. The petitioner-trust contended that the High Court passed an order of stay without notice to either the complainant Trust or the EOW, the agency responsible for the ongoing investigation. It was also submitted that the State’s Public Prosecutor had not been served with the writ petition at the time of hearing.Further, the EOW was not impleaded as a party in the writ proceedings, despite being the investigating authority. The trust emphasised that such a stay order, passed ex parte and without reasons, was contrary to the principles laid down by the Supreme Court in Neeharika Infrastructure Pvt Ltd v. State of Maharashtra and Asian Resurfacing of Road Agency v. CBI..The Supreme Court thus stayed the order of Bombay High Court and permitted the investigation to proceed. .Lilavati Trust was represented by Senior Advocates Abhishek Manu Singhvi, Mukul Rohatgi and Devadatt Kamat along with advocates Utsav Trivedi, Manini Roy, Monish Bhatia and Piyush Tiwari on of TAS Law..Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.