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HC allows sale of equipment from 40 more Talwalkars

YB WEB DESK. Dated: 1/21/2020 11:00:31 AM

Mumbai, Jan 20 The Bombay High Court has allowed sale of equipment from 40 closed gymnasiums of the beleaguered Talwalkars Health Clubs Limited (THC), taking the total number of outlets from where equipment can be sold to 90. These 40 gymnasiums are spread across the country with almost one-third of them – 13 – located in Pune alone. In an order passed last week, Justice Gautam Patel accepted submissions made on behalf of Tata Capital Financial Services Ltd (TCFS), allowing it to not only take possession of the equipment taken on lease by THC, but also to sell them. Rejecting THC counsel’s objection to the sale, Justice Patel observed: “That opposition does not take into account that with every passing day the value of that equipment diminishes. It deteriorates in condition and value when unused and not maintained, apart from routine devaluation over time.” The court further made observations about THC’s capacity to repay its dues, saying: “It is doubtful that the sale of even all the TCFS-owned equipment will cover all its dues. I fail to see how Talwalkars can be heard to argue that without having any concrete plan to pay arrears and to regularise its lease rental account with TCFS, it should be allowed to continue using the equipment (literally free of costs), or that TCFS should not be permitted to sell it.” The case pertains to TCFS providing finance worth Rs 36 crore to Talwalkars’ Better Value Fitness Ltd for taking various equipments required in fitness gymnasiums on lease. These liabilities were eventually transferred to another firm from the group – Talwalkars Health Clubs Limited, as first reported by this newspaper on November 22, 2019 (Court appoints receiver to take possession of Talwalkars’ equipment). In December last year, the court had also allowed TCFS to sell gym-equipment that it took over from around 50 outlets across the country. This order was appealed by THC before a division bench of HC, which rejected the challenge earlier this month. According to information provided by THC to the court, it had installed equipment leased from TCFS at 103 locations across the country. Of these, the 40 locations with respect to which the court has now passed directions were locked in a dispute with the respective owners of the premises, therefore access to THC was blocked.