By The Hindu Bureau
Copyright thehindu
A private financial firm took physical possession of City Hospital, a prominent healthcare institution located along M.G. Road in the heart of the city with a legacy spanning decades, under the SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest), on Wednesday reportedly following default in repaying loan taken by its Mumbai-based parent company, leading to mounting debts of around ₹35 crore.
Of the seven patients admitted to the hospital, all except one, who had undergone surgery for a hernia, were either discharged or transferred to other hospitals. One nurse was permitted to attend to the patient, who is expected to be discharged on Friday. Likewise, all departments, except the one administering IVF (In Vitro Fertilization) treatment, were shut down to ensure continuity of care for a patient scheduled to undergo the procedure on Sunday.
Reportedly, the hospital was served notice of the impending takeover of the possession on Tuesday, along with instructions not to admit new patients or schedule surgeries. Tata Capital officials initiated the process of taking over possession around 11 a.m., armed with a court order and in the presence of officials of Health and Police departments. The procedure continued until around 5:30 p.m. Security personnel have been deployed to redirect any patients approaching the hospital to nearby facilities.
Reportedly, the hospital has been granted seven days to remove non-mortgaged equipment and hand over the premises to the firm. Senior members of the hospital administration were unavailable for comment, although multiple doctors practising at the facility confirmed the takeover of possession. It is learnt that the hospital has committed to pay a certain amount within a week though it could not be independently verified.
According to the financial firm sources, the parent company of the hospital owner initially secured a loan of ₹39.63 crore in 2019, followed by an additional ₹6.93 crore in 2021. Tata Capital representatives stated that the total outstanding debt was reduced from ₹46.63 crore to approximately ₹35 crore after the firm attached certain properties in Mumbai.
“We had requested the hospital owners to pay at least ₹5 crore upfront and proceed with a one-time settlement to avoid attachment, but they failed to comply. They will now be served a 30-day Right to Redemption notice, after which steps will be taken to e-auction the property, which spans roughly 92 cents,” said sources from the financial firm.
The firm initiated proceedings under the SARFAESI Act in March 2023, followed by symbolic possession of the property in July in the same year. The property will be returned if and when the dues are cleared.
