“Ratify the agreement”

You have so far not been able to procure any offer for use of the said Hospital property for purposes for which it is meant leave aside on terms better than those offered under the agreement with Krimson. Since you have not been able to obtain any offers, please authorize/ratify the agreement with Krimson without any further delay,” so wrote honorary secretary of the Parsi Lying-In Hospital (PLIH) and former Bombay Parsi Punchayet (BPP) trustee Maneck Engineer in a letter dated May 12, 2012 to the seven trustees of the BPP. Engineer was referring to a proposal mooted by Krimson Health Ventures Private Limited, endorsed by the Hospital’s managing committee almost nine months ago and forwarded to the BPP trustees for approval.

"Although the agreement with Krimson is very beneficial to the Parsi community and its beneficiaries, as it envisages construction and running of a new hospital for orthopedic treatment and medical care at the entire cost of Krimson and in addition, provision of free beds for Parsis and consideration linked to gross revenue generated by the new hospital for the Parsi Lying-in Hospital Trust, we accepted your suggestion and at your request, we even agreed to keep the agreement with Krimson in abeyance till April 9, 2012,” noted Engineer.

The agreement with Krimson provides for a minimum lease rent of one crore rupees per annum (starting after 42 months), five percent of the revenue garnered when the billing reaches Rs 75 crores ($ 13,636,363) with Krimson bearing the BMC (Bombay Municipal Corporation) and collector dues; in addition 10 percent of the inpatients and outpatients from members of the Parsi community would be treated free of cost.

"You undertook to bring better offers for utilization of the Hospital property,” mentioned Engineer. "You held discussions with Breach Candy Hospital Trust. You have been negotiating with Cathedral (and John Connon) School for an outright sale (though not permissible) of the Hospital property. Almost nine months have elapsed from the date we requested you to ratify the agreement with Krimson. However, up to date, you have not furnished us with a single offer for utilization of the said Hospital property. On the contrary, you sought our permission to commence an auction process for an outright sale of said Hospital property for any commercial use by the purchaser. We had no option but to reject your said request for permission as it would have resulted in the trust and the Parsi community permanently losing the Hospital property and as such a sale would be completely against the charitable objective for which the Hospital property was settled on trust.”

The managing committee contends that though the BPP are the trustees of the Parsi Lying-In Hospital Trust and custodians of the property, the BPP is obligated to carry out the dictates of the PLIH managing committee as per the trust deed. The managing committee has obtained a legal opinion from noted lawyer and at that time additional solicitor general of India Darius Khambata endorsing their point of view (see "Within the purview,” page 27). Khambata is presently advocate general of Maha­rashtra.

Referring to a letter from the BPP dated November 17, 2011 PLIH treasurer Ratoo Dastur stated, "We have noted your proposal to have a joint discussion in the matter of the PLIH… We have no objection to a joint discussion in the matter, on a without prejudice basis… In the meanwhile, please note that you are not entitled to in any manner deal with or dispose of the said demised premises and any such disposition shall be in breach of trust and entirely at your risk.”

Ownership plaque placed at Hospital entrance by BPP in December 2011

In a letter addressed to the BPP trustees dated December 22, 2011 renowned orthopedic surgeon Dr Arun Mullaji stated "we would be happy to attend a joint discussion wherein we can make a presentation on the project to the esteemed trustees…

"Presently, the hospital building is totally unused and is in dilapidated condition. Pursuant to the agreement we will establish a Centre of Excellence in Orthopedic and Neurosurgery, especially dealing with diseases of the spine and joint, sport injuries and rehabilitation, medical facilities for which are grossly inadequate in our city. Our aim is to establish the first stand-alone Neuro-Musculoskeletal Center of Excellence in India which will serve as a reference center for diseases affecting the Neuro Musculoskeletal system. This will benefit the Parsi-Irani Zoroastrian community immensely as the longevity of life has increased in the community and age related musculoskeletal diseases like osteoporosis, arthritis, etc are on the increase in the community. Our proposed Bone and Joint Rehabilitation Centre will specially help these patients.

"It would be of particular interest to you that under the terms of the agreement a reservation has been created for Parsi patients over and above other members of the public, whereby we will provide free treatment to the members of the Parsi-Irani Zoroastrian community up to 10 percent of inpatient beds and 10 percent of outpatients.

"We also wish to inform you that the agreement has been entered into after tremendous amount of deliberation and negotiations. Besides paying lease rent being percentage of the gross revenue of the proposed hospital, we have also taken the burden of all premium and charges payable to the collector, which amounts to 50 percent of the lease rent payable annually. We have also taken the onus in getting the expired lease renewed (lease has expired for the last 20 years ­— editors) on behalf of the institution at our own costs and bearing the increased lease rentals which we understand from the Revenue department, that if the renewal is permitted, it shall be at a percentage of the Ready Reckoner (land price stated on government records — editors) value of the land.

"Further, we have also undertaken to pay all redevelopment cost, premium and charges to Urban Development department and MCGM (Municipal Corporation of Greater Mumbai). According to our estimates, these costs alone will be in excess of Rs 10 crores and the development of the new state of the art facility will involve an estimated investment of about Rs 100 crores.”

In a letter dated December 29, 2011 signed by the BPP’s chief executive Mehli Colah addressed to Dastur, he noted the trustees were agreeable to a meeting "only if you give an assurance to cancel or at least keep in abeyance all your dealings which you are currently having, including agreement with Krimson Health Venture Private Limited.” On January 9, 2012 Engineer replied "without going into the correctness of what is stated in the aforesaid letter, we are agreeable to keep the said agreement in abeyance for a period of three months from the date of this letter.”

Accordingly a meeting was held on January 31, 2012 at the BPP office at which six of the trustees were present, Dinshaw Mehta, Arnavaz Mistry, Khojeste Mistree, Yazdi Desai, Armaity Tirandaz and Muncherji Cama (the latter is also a member of the managing committee). Jimmy Mistry was absent. Doctors Mullaji and Prakash Khub­chandani represented Krimson along with PLIH managing committee members Minoo Shroff who is chairman, Dr Rustom Soonawalla, Mehernosh Cura­walla and Yezdi Bhagwagar. The other members on the managing committee are Engineer, Dastur, Dinyar Jamshedji, (former BPP trustee) Dr Nelie Noble, Sam Jijina, Noshir Dad­rawala and Rusi Khambatta.

According to a "summary of the discussions,” of the meeting prepared by Bhagwagar, Khub­chandani explained "the choice of putting up a super speciality hospital was made after detailed investigation and research. The property being in a non-residential area it was not advisable to have a multi-speciality hospital, apart from the fact that the development potential was too less for a multi-speciality hospital. A mother-child hospital was also ruled out after consultation with various doctors and health care operators, as the average stay has to be at least four to five days per patient for the hospital project to be viable, which is not so in the case of mother-child hospital and the hospital is not located in a residential locality…

"Mullaji carries out almost 800 knee replacements every year, Dr Anant Joshi 1,500 arthroscopies a year, Dr Sonu Ahlu­walia 3,000 arthros­copies a year and Dr Alok Sharma 600 spine surgeries per year. As all these doctors had assured that substantial percentage of their practice would be diverted to this hospital, there will be no gestation period and the gross revenue of Rs 75 crores is likely to be achieved in the second year of operation itself.” As per the agreement five percent of the revenue accrued would go to the PLIH once the Rs 75 crore turnover is achieved.

Soonawalla also confirmed that a hospital meant for gynecology and obstetrics would not be viable in view of the current scenario where such cases get admitted into nursing homes and not any specialized unit. He noted "the number of deliveries within the Parsi community is very low and in fact the number of deliveries per month in the (B. D. Petit) Parsee General Hospital is not more than 10…

Mehta stated the BPP were owners of the PLIH and they were being deprived by the managing committee, from developing their own land. Whilst denying Mehta’s contention, Bhagwagar pointed out the land in question belonged to the collector and no one else.

Desai voiced his apprehension stating that "the judicial system in India is so bad that it would be impossible for the PLIH to get back the property on the expiry of 30 years. Mehta intervened stating that it is 30 plus 30 years as there is a clause for renewal. Bhagwagar responded stating that all the safeguards have been incorporated in the agreement,” and they were willing to meet any lawyer of the BPP’s choice in "making the agreement tighter if so advised.”

When Desai stated that the lessee would take protection under the Rent Act, Bhagwagar replied that "the Rent Control Act would not apply as the share capital of Krimson is in excess of Rs 1 crore (companies that have a paid up share value of one crore rupees and above are not entitled to protection under the Bombay Rent Act — editors). He further pointed out that Krimson is precluded from reducing its capital below one crore rupees or such other limit as may be specified from time to time under the Rent Control legislation.”

Rear entrance to the Hospital

Later Mehta stated that "the present proposal is not in the interest of the Parsi community and that BPP itself would like to develop a hospital for the larger benefit of the Parsi community. Bhag­wagar pointed out that BPP "had no authority to carry out any such activity.” Cama interrupted Mehta stating that BPP "had no funds for such activity.” Mehta stated that he "would arrange for such funds.” Bhagwagar further added that the PLIH is "no longer meant for the Parsi community only as the objects were expanded in 1973 to admit even non-Parsi patients.” Mehta stated that "in such an event BPP would set up a cosmopolitan hospital at its cost.” Bhagwagar mentioned that "(the) BPP trust deed would not authorize the BPP trustees to put up a cosmopolitan hospital.” Shroff intervened stating that "we should have some concrete proposal rather than putting up vague and non-workable proposals.” Mehta reportedly conceded that he had "no other proposal.”

Mistree stated that "the main bone of contention is that the BPP trustees have not been kept informed of the proposal and only after the agreement was executed and the Charity Commis­sioner’s order obtained that the BPP trustees were informed of the proposal. BPP trustees therefore felt ‘slighted.’” Bhagwa­gar responded saying that the agreement was "clearly made subject to the authorization/ratification from the BPP trustees and that almost nine months have been given to BPP to bring a better offer so that the same can be matched by Krimson.” Mistree intervened stating the managing committee had "failed to win over the goodwill of BPP trustees and therefore this ‘traffic jam.’” Bhagwa­gar stated that the managing committee had undertaken the proposal with a view "to create goodwill amongst and for the benefit of the public at large and the Parsi community in particular.” He added that looking after "the interest of the beneficiaries is more important than creating goodwill amongst the seven trustees of the BPP.”

Parsiana sent a text message to Mehta on May 29, 2012 informing him that the publication was writing about the development and inquired if he wished to issue any statement on the subject. Mehta texted a response requesting Par­siana not to "complicate the matter and vitiate the atmosphere. We are trying to work out a compromise.”

Disclosure: One of the tenants of the PLIH is the mother of the person who runs Parsiana.