High Court Setback for Hospital Defaulting on ₹77 Crore Loan; Path Cleared to Hand Over Property to Bank
Ranchi: In a significant ruling regarding a multi-crore rupee bank loan default case, the Jharkhand High Court refused to grant relief to Deoghar’s Maa Lalita Hospital and Research Centre. The court observed that the hospital management had been obstructing the bank's recovery process by repeatedly resorting to legal maneuvers.
According to the case details, the hospital had availed a loan worth crores from Indian Bank (formerly Allahabad Bank) for the construction of the hospital facility. Due to non-payment on time, the bank declared the account a Non-Performing Asset (NPA). Although an opportunity for a settlement was subsequently provided, the hospital management failed to fulfill the agreed terms.
Following this, the bank auctioned the hospital's property under the SARFAESI Act; Yashoda Hospital and Research Centre Limited placed the highest bid of ₹44.22 crore and deposited the full amount.
However, the hospital management obtained a stay from the DRAT (Debt Recovery Appellate Tribunal) against the issuance of the sale certificate. The Jharkhand High Court declared this stay illegal, stating that the DRAT Chairman could not issue a stay order by invoking administrative powers.
During the hearing, the court made strong observations, noting that the hospital owed more than ₹77 crore. It emphasized that this was public money and must be recovered at all costs. The court further remarked that instead of repaying the loan, the hospital management had merely attempted to delay recovery by abusing the legal process.
Setting aside all interim stay orders issued by the DRAT, the High Court directed Indian Bank to immediately issue the sale certificate in favor of the successful auction purchaser.
