The Hindu : Tamil Nadu News : Court disallows sale of medical college run by Kanchi trust

Online edition of India's National Newspaper
Wednesday, Feb 01, 2006

Tamil Nadu

Tamil Nadu

Court disallows sale of medical college run by Kanchi trust

Special Correspondent

"Proposed sale would be detrimental to the interest of the trust"

CHENNAI: The Madras High Court has disallowed the Kanchi Mutt's bid to sell its medical college and teaching hospital to the Chettinad group.

Justice R. Banumathi, dismissing a civil suit instituted by the Sri Kanchi Kamakoti Peetam Charitable Trust, said the "hasty" decision could not be approved as "this court is of the view that the proposed sale would be detrimental to the interest and the object of the Trust."

The Trust said it had suffered a revenue loss of Rs. 22.62 crore since 2003. The Chettinad Hospitals Private Limited had come forward to take over the assets in an "as is where is condition" for Rs. 105 crore. The Trust sought the court's permission or authorisation to transfer the assets . The decision was taken under a "compelling situation" to meet its commitment towards secured and unsecured creditors.

"Reasons vague"

Pointing out that the Trust had not submitted any material or detailed statements to show as to how the liability swelled up to a huge amount, Ms. Justice Banumathi said, "The reasons stated in the petition for the liability are vague." Citing the Trust's affidavit that about 75 per cent of the about 2.55 lakh outpatients and 22,200 inpatients treated at the hospital since its inception belonged to the poorer sections of society, she said, "The running of the hospital by the Trust alone would best subserve the poorer section of the society and achieve the object of the trust."

The Trust had "hurriedly taken the decision to sell away the college and hospital" instead of waiting for a reasonable time. "Difficulties in running the institution cannot be the reason to sell away the entire assets."

Ms. Justice Banumathi further said: "Admittedly the Trust runs several other organisations. No other alternative suggestion of disposing of any other asset, which could be adjusted in running the hospital, is forthcoming. No convincing reasons are forthcoming. ... The question arises as to why some other properties of the Trust not be sold and utilised for discharging the existing liability of the hospital to serve the basic requirement of the rural masses — healthcare."

Disapproving of the private negotiations with prospective buyers, she said, "The offer of sale by such private negotiations, which is not visible to the public eye, gives rise to suspicion."

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