The Escorts management, which unceremoniously removed the noted cardiologist as executive director of the premier institute last week, announced an out-of-court settlement with Naresh Trehan, reinstating him to his earlier position.

In a joint statement both the parties said that events of last few days were because of misunderstanding and they regretted it.

''''These allegations stand unconditionally withdrawn,'''' the joint statement said.

According to sources, Trehan will vacate office within two weeks. He will also give up 10 per cent stake at Escorts as part of the compromise formula.

Escorts has recognised the valuable contribution made by Trehan and the management would like to ensure a healthy and smooth work environment. Both parties would withdraw their cases from the court on Saturday.

''''The whole idea is to do the healing process so that the patients can recover. Shivinder Mohan Singh and I have talked and a positive thing has happened between the management and myself, and as of now my crtical team, including Dr Yatin Mehta, is back,'''' said Dr Trehan.

The entire controversy had erupted when Dr Trehan was asked to quit as head of Escorts hospital by the Fortis management last week.

Fortis had sacked Dr Trehan alleging that he was running a parallel hospital project called Medicity in Gurgaon and it had led to a conflict of interest.

The matter had also been dragged to court when Escorts doctors supporting Trehan had filed a case against the hospital management.

The crisis also saw a free exchange of charges and counter-charges between Shivender Mohan Singh, managing director of Fortis Healthcare which has majority stake in Escorts, and Trehan, head of Escorts Heart Institute and Research Centre (EHIRC).