Deal between Parsi General Hospital and Medanta Group headed for another legal challenge

MUMBAI: The controversial deal between the 106-year-old Parsi General Hospital (PGH) at Breach Candy and Gurugram-based Medanta Group is headed for another legal challenge.

Activist Zoru Bhathena on Wednesday served a legal notice on the PGH managing committee as well as trustees of the Bombay Parsi Punchayat, stating that the agreement is in contravention of the hospital’s trust deed.

“If you all insist on going ahead with such a deal, without seeking requisite permissions, I will surely put forth these facts before the appropriate court/forum and seek adjudication of these issue,” said the notice.

A section of the Parsi community has opposed the deal on the ground that PGH has not sought a sufficient bank guarantee from Medanta for operating a new hospital building within the existing 10-acre complex. The PGH managing committee has also been accused of not inviting public bids from other hospitals and negotiating a secret deal with Medanta.

A Hong Kong-based Parsi couple Jal and Pervin Shroff has agreed to donate Rs 150 crore for the construction of the proposed 7-storey building, which will be equipped, managed and operated by Medanta for 45 years.

Medanta will pay a fix annuity of Rs 12 crore and percentage of gross billable revenues from the operation of the new cosmopolitan hospital every year to PGH.

“I believe the current decision to hand over Rs 1000 crore worth of property to Medanta is not permissible by law and is not in the interest of the PGH,’’ said the notice.

“The donors and Medanta have decided to call off the new hospital building project if it cannot proceed in the way they want. This is their surely their prerogative. However, if their plans are in the interest of PGH, they can surely approach the competent court/authority and seek legal permissions to proceed with the project. Threatening to pull out from the project when legal options are available to proceed, does not reflect well on their decision-making process. However, should they change their mind and decide to proceed with the project, without complying with the law, I shall have no option but to move the court,” said Bhathena.

The legal notice further said that the entire deal is based on using PGH’s money (donation) and land including its floor space index (FSI) and handing it over to a third party. “The stated benefit to the hospital is completely untrue,” it said.

Early this week, the PGH committee said it did not have to take the charity commissioner’s (CC) permission to go ahead with the deal to start a new cosmopolitan hospital.

In a reply to advocate Khushru Zaiwala, who has filed a separate case with the CC, the hospital’s managing committee said, “The respondents have suo moto followed best and prudent practices in respect of management of trust properties so as to ensure that the interests of the charity are secured to the best extent possible,’’ he said.

The agreement stipulates that Medanta will have “absolute discretion and control in all matters relating to the management and operation of the new hospital including charges for services, employment policies, procurement of inventories, supplies and services, promotion and marketing…”