The National Company Law Tribunal (NCLT) Principal Bench, New Delhi (camp at Chennai), has allowed the Tamil Nadu government to temporarily take over Santosh Hospitals in Besant Nagar, which is closed and under liquidation, and utilise its infrastructure for COVID-19 treatment.
In an unprecedented sitting on Sunday, the Bench passed on an order on an application filed by the Greater Chennai Corporation.
“Though it is Sunday, this Bench has taken up the hearing on an urgent basis, since the COVID-19 pandemic has been rattling lives and the economy of the nation,” said B.S.V. Prakash Kumar, acting president of NCLT.
Santhosh Hospitals had filed for voluntary insolvency and is under liquidation now. The possession of the hospital is with Muthoot Fincorp Limited, one of the lenders to the hospital. The other major lender is DCB Bank.
In its application, the Chennai Corporation said the Tamil Nadu government had directed it to search for suitable hospitals to conduct tests and treat people diagnosed with COVID-19. It identified Santosh Hospitals for the purpose.
The hospital has sufficient beds and infrastructure to conduct tests and offer treatment, it said.
“The Greater Chennai Corporation can take over the hospital on an ‘as is where basis’, without any further liability/expenditure on the part of the liquidator, including charges such as electricity, water usage, cleaning, sanitation and repair and maintenance, among others,” the NCLT said.
The Corporation cannot claim the expenditure from the liquidator or the lenders and should not allow the promoters or their representatives to enter the premises without the permission of the lenders, it added.
