SC rejects the appeal in the escorts case.

NEW DELHI: The controversy over the status of Escorts Heart Institute and Research Centre (EHIRC) — whether it can be converted from a charitable society to a company — would continue to face the judicial litmus test in the Delhi High Court, the Supreme Court has said.This conclusion emerged as a Bench comprising Justices R V Raveendran and J M Panchal dismissed an appeal filed by the Rajan Nanda-controlled Escorts Limited questioning the wisdom and legality behind the HC’s decision to entertain erstwhile director Anil Nanda’s suit.Escorts had challenged an HC division Bench’s order reversing a single judge Bench’s decision to dismiss Anil’s suit questioning the sale of EHIRC to Fortis for a whopping Rs 565 crore after an alleged illegal change of its character from a charitable society to that of a company.With the SC dismissing the appeal, the ball will be back in the single judge Bench’s court in the HC, as was directed by the division Bench, for a detailed hearing and adjudication of Anil’s suit and till then, there will be a status quo in the sale of EHIRC to Fortis.Escorts had taken a highly technical legal route under the Civil Procedure Code (CPC) for dismissal of Anil’s suit and for validating the HC single judge Bench’s order. It said Anil had instituted the suit without obtaining necessary permission from the court as was mandatory under the CPC and hence should be thrown out at the threshhold.Citing an earlier Supreme Court judgment, Escorts Limited argued before the apex court Bench that “prior grant of leave under Section 92 of the CPC is not an empty formality but is in fact a jurisdictional condition precedent for the institution of a charity suit”.The apex court, like the division Bench of the HC, was unimpressed by the plea and asked the parties to reserve their arguments before the single judge, which would now get down to examine the nuts and bolts of the charity suit instituted by Anil.

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