DGHS slaps Rs 500-crore fine on Fortis Healthcare

The Directorate General of Health Services (DGHS), an attached office of the health ministry, has slapped a Rs 503-crore fine on a Fortis Healthcare subsidiary. The fine pertains to non-compliance of land-related laws of the Delhi Development Authority (DDA).

"One of the subsidiaries of the company - Escort Heart Institute & Research Centre Limited (EHIRCL) - has informed us that in a long-disputed case pertaining to the period 1984-2007, it has today (Friday) received an order from DGHS for the deposit of an amount of Rs 503.36 crore," Fortis Healthcare said in a BSE filing.

This is "towards recovery of unwarranted profit made by it for alleged non-compliance of the conditions of allotment/lease of land since its allotment in 1982," said the filing.

DDA had granted the land to the hospital on the condition that it would provide free treatment to 25 per cent of its patients. However, in 2005, the company contested that just 10 per cent of the seven acres of land was granted with this condition.

EHIRCL, said in a filing on Friday, the impugned order in its view is legally flawed and untenable. "The management will challenge the same in the Hon'ble High Court of Delhi or such relevant authority to seek suitable legal remedies available to it under law," said Fortis Healthcare.