2020 (11) TMI 675 - Tri - Insolvency and Bankruptcy

Permission to applicant/State of Kerala to use the Corporate Debtor Hospital, RIMS Hospital, Erattupetta as Covid Hospital for Covid patients with immediate effect - Section 33(1)(b) of IBC, 2016 - HELD THAT - The request of the applicant District Collector seems to be reasonable in view of the pandemic condition in the State of Kerala, due to Covid-19. Hence this M.A is allowed with the following conditions - I. A detailed inventorisation of the subject property be carried out in the presence of the officials of the Applicant, the representative of the Liquidator prior to handing over of the premises to the applicant. II. During the acquisition of the Corporate Debtor (Hospital)the applicant cannot change or make any permanent structure in the aforesaid premises. III. The subject property (Hospital) be taken over by the Applicant on as is where is basis without any further liability/expenditure on the part of Respondent, including but not limited to Electricity charges, Water usage, cleaning Sanitisation, Repair and maintenance of building and repairs and maintenance to machineries and equipment s, etc. till the date of returning possession. (in this connection GO(MS) No.21/2020 Disaster Management Department dated 25.06.2020 may be referred to). IV. that any amount that is spent by the applicant for using the Hospital cannot be claimed from the Respondent herein. V. the Applicant shall not allow the Promoters or their representatives to enter the Hospital premises or engage in the management of the Hospital during the period when the Applicant is utilising the property. VI. On receipt of the letter based on this Order, the Liquidator will immediately hand over the premises to the applicant District Collector, for a period of Two months (60 days). VII. The Applicant will return the premises to the Liquidator after expiry of two months (60 days) from the date of taking over the premises from the Liquidator, without any wear and tear and on as is where is basis. In case the purpose for which the premises taken by the applicant is not completed, the applicant District Collector is at liberty to approach this Bench for further orders. If no request for extension is received it would be presumed that the applicant is no more interested to continue the purpose for which the Corporate Debtor is taken and the Liquidator can proceed to procure back the Corporate Debtor (Hospital) for Liquidation purpose. VIII. The premises shall be used only for Covid Treatment under Covid 19 and that it should not be used for any other purpose, whatsoever.

Summary

Issues:
1. Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 for using Corporate Debtor Hospital as Covid Hospital.

Analysis:
1. The Tribunal received an application from the District Collector seeking permission to use the Corporate Debtor Hospital as a Covid Hospital. The hospital was under liquidation, and the applicant requested to utilize it for Covid patients due to the increasing cases in the state.

2. The Liquidator opposed the application, citing pending liquidation proceedings and potential buyers interested in acquiring the hospital. The Liquidator expressed concerns about affecting the liquidation process by repurposing the hospital for Covid treatment.

3. The Tribunal considered Disaster Management Act guidelines and previous court decisions related to requisitioning premises for public health emergencies. After hearing arguments from both parties, the Tribunal acknowledged the urgent need for additional Covid treatment facilities and allowed the application with specific conditions.

4. The Tribunal imposed conditions such as detailed inventory, prohibition on structural changes, and no additional liability on the Liquidator for expenses incurred during the usage period. The Applicant was instructed to return the premises in the original condition within 60 days unless an extension was requested.

5. The Tribunal emphasized that the premises could only be used for Covid treatment and not for any other purpose. The decision aimed to balance public health needs with the ongoing liquidation process, ensuring the protection of stakeholders' interests and employee livelihoods.

This detailed analysis outlines the key points of the judgment, including the parties' arguments, the Tribunal's considerations, and the conditions imposed for utilizing the Corporate Debtor Hospital as a Covid treatment center.