Lessons from a Hospital Tragedy

Social edupreneurs like Dr Manoj Nayak deserve respect. I am shocked to see how quickly our society can brush aside all the contribution of this man towards education, healthcare, social development and what-have-you in the state of Odisha and be swayed by a hostile media. Don’t we, the parents of thousands of children who can now aspire to become doctors, engineers and business executive owe something to him? Don’t we, the children of thousands of ailing parents receiving quality healthcare in the state owe something to him?

The media pundits would tell us, well, he did it all for money. I fail to understand how a Trustee who has endowed all his assets to the society be equated with a corporate tycoon seeking to maximize profits? Aren’t we questioning the very edifice of our legal system, the eco-system and our very social foundations when we unhesitatingly accept a possibility that “all philanthropists do it for money”!

Why should we single him out when only 0.5 percent of all hospitals are fire-safety-compliant? How can we digest the rant by the media pundits to close down a hospital with 1200 beds, which is untiringly serving the ailing and the sick? How can the immediate closing down of all the non-compliant hospitals in the state help the provision of healthcare? Should they not be given time to rectify their systems?

I find it a bit strange that I feel like responding to this news item, sitting on the shores of the red sea in the city of Jeddah in Saudi Arabia. Dr Nayak is no relative of mine. I have little interest in politics. I don’t have any vested interests in his reputation that has seen a barrage of onslaughts since the mishap. Perhaps I feel for him because there is a social entrepreneur in me and I always wanted to revert to my native state and serve the people with sustainable developmental projects. Perhaps unwittingly I have accepted Dr Nayak as my ideal. Therefore, what is happening now is truely terrifying.

The Bhubaneswar hospital tragedy will be remembered for the tragic human loss – the death of the twenty plus ailing patients due to a fire, the reason for which is yet to be ascertained. It will also be remembered for the marathon media trial of a hapless philanthropist and social worker. His ambitions took him to IIT to earn a degree in Computer Science and revert to his state Odisha as a university lecturer. He moved on to establish one of the finest private universities in the country (ranked 16th as per government rating in 2016) and received wide acclaim as a social edupreneur contributing to the all-round development of the region.

As is often cited as a good practice in the management of non-profits, this Founder-Trustee “kept himself away from the Board of Management of the university and the hospital he founded”. And as the headlines in a section of media suggest “even in the websites of the SOA University his name was conspicuous by its absence.”

A good practice has been turned up-side down to look like one with a sinister motive.

Separation of ownership from management is a celebrated principle. It is a globally celebrated principle not just in corporations but in non-profits too. Eugene Fama, the American economist and Nobel laureate, often referred to as “The Father of Finance” writing with Michael Jensen in a widely-cited article in the Journal of Law and Economics argues: “the separation of decision and risk-bearing functions observed in large corporations is common to other organizations such as large professional partnerships, financial mutuals, and nonprofits”. The authors further assert in the context of non-profits like universities that “a more formal structure of diffused decision management and control is helpful to Trustees who do not have specialized knowledge about a university’s activities.”

In a Trust, the role of the endower and trustees are clearly spelt out. Section 10 of Indian Trust Act, 1882, defines a trustee as follows: “Every person capable of holding a property may be a trustee; but where the trust involves the exercise of discretion, he cannot execute it unless he is competent to contract.” The primary duty of a Trustee is to obey the directions of the endower and the preservation of the Trust assets. Section 13 of the Indian Trusts Act states that “A trustee is bound to to take such other steps as, regard being had to the nature and amount or value of the trust-property, may be reasonably requisite for the preservation of trust property and the assertion or protection of the title thereto”. The paramount duty of the trustee is to take all necessary steps of preservation and protection of the trust property.

It is an irony that the noble motive of a philanthropist to do things in a professional and competent manner has been deliberately misconstrued as the output of a criminal mindset that could predict the impending disaster and hence, opted for a preemptive exclusion from the Board of Management.

It is sad. Philanthropy is an idea that needs continuous rejuvenation from thought leaders and leaders  who can put the idea into action. If the motives of actors are under constant suspicion, thanks to our “vigilant-plus” media, I am afraid we may soon have to write the obituary of all philanthropy-driven actions in the region.

Related Articles


Your email address will not be published. Required fields are marked *

  1. Incident is tragic & un-called for. We must stand behind those innocent lives lost in the accident . On the contrary SUM had earned accolades for delivering quality & affordable healthcare in the state during a time when the state machinery has failed to do so . Looking into the the larger interest of the public we should not engage in the blame game rather think for the institution which has to go a long way in the years to come.

  2. Do not get biased by the paid, unethical media and their businesss. Go and find the fire safety measures in the public places, government offices, hospitals, institutions. It is a trend that ministers and politicians play a dirty politics. Think about the recent bus incident and one strike by bus owners association, then the bus owner is out from the custody. Children died in Sishu Bhawan, who was arrested? Oh, that is government, so no law. Children dying because of Japanese encephalitis, who is arrested? And those who do not have any idea about SUM hospital, its facilities, infrastructure, service and role in the society, please do not talk nonsense. And about Arnab Goswami, he is a bullshit of Indian paid media, the most notorious journalist, ruins the ethics of journalism. For your kind information, Dr. Manoj Nayak is a noble and responsible Indian citizen who works for the society and surrendered himself taking moral responsibility for the accident which hardly any others do.

  3. Have you seen wiring condition of Secreatariat? If any thing goes wrong then who will be behind the bar? If any plane will crash who will be behind the bar? If any bus will make an accident who will be? It is very unfortunate. His contribution to our society has ceased to matter.Since last 10 years thousands of patients have been saved, but it does not matter. What matters is why as the owner did not check the safety factor. Really if any one does good for society then he must be punished. When none of the hotels or hospitals have taken fire safety approval why they are open today? Please close them till fire certification is given by Govt. Even after declaration of compensation still he is behind bar. So what is the moral of the story………….

  4. There are reports in the media that a large number of hospitals to the tune of 500 numbers in Odisha do not follow fire safety norm. Only a few (say 3 to 4 ) follow the norm. Then what is the duty of the govt organizations, which are watching and controlling the norm. It is a misfortune on the part of the victim patients and the SUM management, who fell prey to the incident. If this would have happened to some other hospital, then another set of patients and hospital would have faced the same situation. So, in my view, it is not the time to point finger only to SUM Hospital management, but to the govt regulatory body. Otherwise, same situation may happen to another hospital tomorrow. I feel, even the govt hospitals and buildings might not have safety norms. Moreover, a huge number of multi-storey buildings like apartments still may not have safety norms. Any fire hazard in those buildings may become much more disastrous than the present case. My overall view “No political colour to the issue, No advantage to be taken by any political group. No escaping by making another a scapegoat. Responsibily to be taken collectively. Come for help. Any organization or Group is of the people, for the people and by the people.”

  5. It is sad to see an argument (propagated in a high intellectual decibel) that since 100 others are doing the same mistake, I should be allowed to do so as well, or it is fine even if I committed the same mistake.

    Secondly, who says that in a corporate structure senior most officers are not punished even when there is no direct default on their part. Our new Companies Act do not even spare the Independent Directors who have no role to play in the day to day affairs of running of a company. So, some heads must roll, and they have to be of highest order.

    Last but not the least, is the author really ignorant that money is not made through a trust structure, or they want us to believe so. All private schools, universities and hospitals are running through either a trust or a society structure. Do you want readers to believe that no money is being made….. If anyone really thinks so, I can and I believe that many of us can take a class on such structuring….

    1. I am sorry that you have missed the central argument of the blog. We must differentiate between a shareholder wealth-maximizing corporate firm and a non-profit; between the shareholder-owners and trustees; and between profit-taking and profit-making. Notwithstanding the media reports or widespread cynicism on the possible abuse of the non-profit structures for profit-taking we must call a spade a spade. Talking about cynicism, how many of us really believe that the so-called external auditors of a firm’s accounts do an honest job of auditing and that the reported profits do reflect the actual profits being made. Yet, the onus of proof rests on us, if we assert that a given business makes more or less profits than what it reports.

      And yes, may be I would not be in a position to attend a class or lecture because of logistics constraints. But I would love to learn how profit-making and profit-taking can be relentlessly pursued by non-profits as a short-term and long-term goal, similar to for-profits. You would indeed be making a significant contribution to Finance as a discipline if you can successfully demonstrate that the distinction between for-profits and not-for-profits is merely one of nomenclature. Yours will be a revolutionary contribution to the theory of corporate ownership (no pun intended). I look forward to the same.

  6. I am not here to resurrect and analyze what is purportedly a tragic incident. There was a huge media outcry over the incident and finger-pointing by the local politicians. As a fallout of the incident, a humble man who is a trustee of the trust and does not specialize in hospital administration is arrested on charges of abatement. But my question, is if you look at the Indian trust act of 1882, a trustee has no role in day-to-day administration of a university, then why is he to be blamed??

  7. Well as it’s said that a coin has two side. You haven’t seen the other side of it. SUM Medical College and Hospital takes lakhs of donation as funds from children seeking admission, if fact it’s the only hospital that tops the list in taking donation in the whole state. So my point is where does this money go!?? Can’t they invest it for the fire safety purpose!?
    The only thing they know is how to make money by playing with lives of people!

    1. That is precisely the point. As someone responding to the Indian Express report asked: Why would not the hospital which invested crores in establishing this hospital and installing state-of-the-art equipment for provision of healthcare bear some marginal cost in installing sprinklers and meeting other norms, such as, putting in place an external ladder?

      Some more relevant questions were raised by the same reader. Did the fire safety implementation authorities did their Job sincerely to see that SUM hospital install the fire safety norms as per directions?? Is it not true to issue fire safety certificates authorities ask for Lakhs of Rupees as bribe ?? Can any body if at all in the world gurantee that iinstalling fire safety systems guarantee zero casualties in case a fire breaks out??

  8. When the certificate of a student is lost due to the negligence of an office staff, should the Head of the Department be punished? Is it the duty of the HoD to look after the certificates of the students. Then why are office staff appointed? Likewise why Manoj Sir will be punished for the fault of the concerned staff or officials?He is an academician and not a corrupt industrialist. He has done many good things for the society. If he is punished no one will dare to do good things in future. Those who are trying to trap him must be punished. I know God will protect him. It is a testing period of his life. Sai baba will save him definitely.

  9. Shouldn’t we judge the steps taken by government? There was a great loss of lives so negligence shouldn’t be neglected. And other than that the politicians also should be punished cause they allow the irresponsibility so it happened.

  10. I sincerely pray for the people who lost there lives. It is a shame that the hospital continued to make money by opening the pediatric department the very next. Could you please give me one proof of effort that has been done for fire safety from 17 Oct till today..and author, if loss of life due to negligence doesn’t move you…then I don’t know what will move you…that you are pehaps a tree…immovable and bend only where there’s sunlight.. (more derogatory comments for Dr Nayak and the author are edited out)

    1. I do share your sense of loss and sincerely pray for the departed souls. I am told all the university staff and students took out a candle light march in honor and memory of the people who lost their lives. However, I disagree with your prescription that the hospital should have closed their doors to patients, for the simple reason that many of them need urgent medical care and attention. It is wrong to attribute the services delivery to money-making motive. But at the end of the day, we see the world through our own eyes and lens. It is equally wrong and perhaps childish on your part to assume that the author has a vested interest in writing the blog. Please grow up.

  11. If the hospital has failed under the so called SOA trust, the state govt should take charge of the hospital immediately and give it to another private player with close eyes on operation. Further, the land given for the hospital was at a grossly below-market price. So let us not talk about the so-called Social Cause. (derogatory comments edited out)

  12. The whole management body along with the head have failed to examine the safety measures inside a well known hospital. This is a serious issue while, what action should be taken against the politicians? Who support the negligence or to understand the difference in the cause of death. If the patients could have been safely evacuated and if the fire could have been in control? There are many plenty people who are into risk due this tragic incident. Let’s accept the fact. There are faults. But the faults of university management cannot be limited to blame few. There’s a need of clear investigation.