While rejecting the application of the Escorts Heart Institute and Research Center (EHIRC), a division bench which was chaired by Chief Justice MK Sarma on Monday ruled that the Delhi Development Authority (DDA), the land allotting authority, was justified in issuing the eviction notice, since the hospital management did not stick to the clauses in the agreement.
The DDA's estate officer had issued a show-cause notice to the hospital for eviction, stating it had violated the terms and conditions of the lease deed that specified 20 percent free treatment for the poor.
In its application against this, the hospital argued that instead of conducting proceedings under the Public Premises Act ('eviction and unauthorized occupants'), the DDA should have filed a civil suit for taking back the possession of the land.
Counsel Sanjeev Puri appearing for the Escorts, now run by Fortis Healthcare Ltd promoted by the Ranbaxy group, argued that the land was never given on lease by DDA to the hospital and the estate officer had no right to issue the eviction notice.
In response, DDA's counsel Ajay Verma argued that Fortis, a commercial hospital chain, had purchased EHIRC last year and that the group was not entitled to avail of the government land, which was allotted at a subsidized rate.
On October 6, 2005, the DDA had asked EHIRC to vacate the 6.9-acre land as hospital authorities allegedly were not providing free beds to a required number of poor patients and they had transferred the hospital to Fortis for Rs 6.50 billion.
The land was allotted at a concessional rate to the Escorts Group led by late HP Nanda for establishing a charitable hospital and the hospital authorities were not supposed to transfer the ownership of the land to a third party, the DDA alleged.
EHIRC was established as a society in 1981 under the Societies Registration Act, 1860. Between April 8, 1982 and June 14, 1996, DDA under the urban development ministry had allotted the land to EHIRC for setting up the multi-specialty high-tech hospital. However, Escorts chief Rajan Nanda established another stock company at Chandigarh and amalgamated EHIRC with it on April 1, 2000. The amalgamated society was registered as a limited company on June 30, 2000 before it was sold to Fortis. The main petition is pending adjudication before a single bench in the Delhi High Court.
The court had directed Nanda to maintain status quo and not to transfer its ownership till the matter was decided. "There is prima facie evidence that some alleged violation has been perpetuated in the deal," the judge had earlier said in an order. Nanda's estranged brother Anil Nanda in a petition alleged that the hospital was being sold violating all rules and regulations as it was established as a charitable institute.
"Late HP Nanda, the founder of Escorts Group of Companies, had conceived the idea of setting up a charitable institute of world fame to help the weaker sections of society and to create a medical infrastructure for the citizens of India. It is with this vision that EHIRC-Delhi was formed as a charitable society," said the petition.