After rumours about Babi suffering from schizophrenia began making rounds, she sought mental solace through alternative contemporary spirituality. She followed "Osho" for a few years and later became involved with the teachings of U.G.Krishnamurti in New York. She returned to Mumbai in 1992 where she was unrecognizable as her former self after having put on a considerable amount of weight. She accused many foreign dignitaries including Bill Clinton and her former co-star, Amitabh Bachchan, of conspiring to kill her but her petition in court was dismissed for lack of evidence. In 2002, she again hit the headlines when she filed an affidavit in the special court hearing the 1993 serial bomb blasts case, claiming that she had gathered clinching evidence against actor Sanjay Dutt showing his involvement in the case, but she did not turn up in court after being summoned saying that she was afraid of being killed.