New Delhi, Sept. 30: Delhi High Court has slammed the brakes on the Rs 585-crore takeover of Escorts Heart Institute and Research Centre (EHIRC) by Ranbaxy-controlled Fortis Healthcare.

Justice Anil Kumar today ordered EHIRC and seven others to maintain status quo till November 22, when he resumes hearing on a petition filed by Anil Nanda challenging the sale. Anil has challenged the conversion of EHIRC’s status from a charitable institution to that of a company.

The deal also appeared to have run foul of the Delhi government, whose health minister wrote to the Delhi Development Authority for getting back the land allotted to the hospital at “throwaway” prices.

One of the conditions laid down in the transfer was that Escorts could not palm off the two-acre plot sans DDA nod.

Earlier this week, Escorts chairman Rajan Nanda had announced plans to sell 90 per cent of the equity in EHIRC to Fortis Healthcare for a total valuation of Rs 650 crore. “We are getting Rs 585 crore in the all-cash deal,” he had said.

The court has issued notice to Rajan, Ritu Nanda, G.B. Mathur, registrar of firms and societies, Chandigarh, the registrar of companies, Jalandhar, and the registrar of societies, Delhi. It asked all of them to file their replies by November 22.

Anil has argued that his father H.P. Nanda had created EIHRC as a charitable institution to treat poor patients. It had also been granted cheap land by the municipal corporation in Delhi.

EHIRC is among the country’s leading speciality hospitals with a turnover of Rs 330 crore and profit after tax of Rs 9.7 crore in 2003-04. The doctors and top management team hold 10 per cent of its equity.

Rajan has been trying to sell his stake in EHIRC for sometime. He wants to use the money to reduce the high-cost debt that tractor maker Escorts Ltd is saddled with.

The group had ceased making profits after 2002-03, the year it made a post-tax profit of a paltry Rs 2.4 crore on a total income of Rs 1,124 crore.

During the quarter ended June 2005, the company posted a net loss of over Rs 57 crore, largely due to the heavy interest burden. The sale was expected to give the group enough liquidity and help it rebuild the tractor business as well as other group operations.

The Escorts scrip closed at Rs 101.75 on the BSE today, 0.93 per cent down from Thursday’s close of Rs 102.7.

Meanwhile, credit rating agency Icra today said it would take a rating decision on Escorts after watching the developments, including legal issues.