Mediheal Group of Hospitals founder Swarup Mishra has received a reprieve after the High Court nullified an auction of the hospital's assets in Nakuru.
Justice Heston Nyaga on Wednesday ruled that seizure and sale of the hospital property by Tango Auctioneers, in a bid to recover a Sh53 million debt owed to 17 doctors, was illegal, null and void.
In the ruling issued on April 30, 2024, the court had directed Mediheal Group to provide security for the admitted sum of Sh40 million in cash within 30 days. Failure to this, the doctors were granted permission to levy attachment on the hospital's assets pending determination of the suit.
However, the doctors, led by Dr John Gwer, proceeded to attach and dispose of some of the hospital's assets through auctioneers. In response, the hospital moved to court seeking orders to stop the disposal before the final judgment was rendered.
Mr Mishra, in a sworn affidavit, accused the doctors of illegally seizing and undervaluing the assets before selling them to third parties.
On June 26, 2024, the court issued interim orders staying the advertisement and auctioning of the assets. Despite the court's intervention, some assets valued at Sh3 million had already been sold.
Auctioneers seize 10 vehicles from Mediheal Hospital in Nakuru
Justice Nyaga stated that the respondents had misinterpreted the law by seizing and selling the assets.
“I find that the events that followed my ruling were a result of a complete misapprehension of the law. The fact that the court ordered an attachment did not mean physical seizure and sale of the applicants' assets. The alleged seizure of the applicant's goods was unlawful,” Justice Nyaga ruled on January 22.
The judge ordered the auctioneer to submit a detailed list of all items seized from the hospital within seven days. Additionally, the auctioneer was directed to return all unsold and unadvertised assets to the hospital within 14 days.
“The auctioneer is to relinquish to the court all costs received as commission from the sale of the hospital’s goods within 14 days,” ruled Justice Nyaga.
Furthermore, the court directed the doctors' lawyer to deposit Sh3 million, allegedly paid to him by the auctioneer, with the court.
The auctioneer was also ordered to provide full details of the sale of each of the hospital's motor vehicles, including the name, address, and contact information of the purchasers, along with proof of payment.
Justice Nyaga barred the National Transport and Safety Authority (NTSA) from processing or transferring ownership of the vehicles purportedly sold by the auctioneer.
“For the avoidance of any doubt, no further physical attachment of the hospital’s property shall be carried out until the case is heard and determined,” the judge ruled.
