RANBAXY-promoted Fortis Health Care's plans to take over the Escorts heart institute suffered a setback with the Delhi High Court today ordering the institute and seven others to maintain status quo regarding its sale till November 22.

Acting on a petition filed by Anil Nanda challenging the conversion of the Escorts Heart Institute and Research Centre (EHIRC) from a charitable institution to a company/non- charitable body, Justice Anil Kumar ordered status quo till November 22, the next date of hearing.

The court also issued notices to Escorts Heart Institute, EHIRC, Ritu Nanda, Rajan Nanda, G B Mathur, Registrar of Firms and Societies, Chandigarh, the Registrar of companies, Jalandhar and the Registrar of Societies, Delhi asking all of them to file their replies by November 22.

Escorts chairman Rajan Nanada had, on Wednesday, struck a deal with Fortis Health Care to sell 90% equity in EHIRC on a total valuation of Rs 650 crore. Rajan's younger brother Anil had, however, opposed the deal and moved the court against conversion of the charitable trust set up to treat poor patients into a company.

Meanwhile, Escorts said it had completed transaction for sale and transferred shares and management of its heart institute to new owner Fortis Health Care, well before the status quo ordered by the Delhi High Court this morning.
"Shares have already been transferred and registered in the name of Fortis Health Care on September 28 and the Board reconstituted with Fortis nominating its directors on September 29," an Escorts spokesperson said. "Transaction is already over and the management handed over to Fortis by Escorts before the order of the honourable high court," the spokesperson said. A spokesperson for Ranbaxy-controlled Fortis, however, declined to comment, saying the matter was sub judice.

Appearing for the petitioner, senior counsel V P Singh submitted that the deal was a complete fraud, as a charitable institution cannot be converted into a profitmaking body. However, his arguments were contested by senior counsel Abhishek Manu Singhvi, who appeared on behalf of the defendants. Singhvi asked why the petitioner had come to the court five years after the EHIRC was converted into a company. He alleged that the petitioner wanted to have monetary gains from EHIRC. Singh retorted, saying Anil only wanted that the hospital remain a charitable institution.