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The Delhi High Court has noted that patient safety is of the utmost significance and that concessions made under government policies to start-ups and MSMEs regarding their expertise and other qualifications cannot be offered in particular industries, such as healthcare. A registered start-up earlier petitioned the court to object to the tender terms set by a super-specialty hospital run by the Delhi government for the purchase of stents, grafts, and valves for the cardiology department.
“The Central Government in order to promote Start-ups and MSME (Micro, Small and Medium Enterprises), entities floated Start-up India Initiative in the year 2016, and various executive instructions were issued from time to time granting relaxations to the Start-up Entities and MSMEs with regard to past performance, bid security and turnover in order to ensure that new talent is promoted in the new competition,” said the bench also comprising Justice Subramonium Prasad.
“The executive instruction does not make it mandatory for any establishment to relax the condition in respect of turnover and prior experience/EMD as the word “may” has been used in the policy Circular dated 10.03.2016. It is true that the Government of India as well as the GNCTD under its NCT of Delhi, 2019 Policy promotes Startups. However, in certain fields past experience and other qualifications cannot be relaxed especially in the field of health care,” the court said.
According to the petitioner, no such relaxation was provided in the present case, which went against the Centre’s start-up policy and also violated Articles 14 and 19(1)(g) of the Indian Constitution. This was in contrast to all other hospitals issuing tenders for procurement that provided relaxations for start-ups and MSMEs with regard to turnover, past performance, and bid security.
The Centre and the Delhi government both support start-ups through their respective policies, but the executive instruction under the Centre’s circular did not require any establishment to relax the condition in respect of turnover and prior experience when dealing with them, according to a bench led by Chief Justice Satish Chandra Sharma.
The court noted that the hospital in question was dealing with an abnormally high rate of deaths in relation to heart patients, and it was during this drop-back that criteria for start-ups and MSMEs were kept strict and the supply of high-quality goods and implants from knowledgeable individuals was sought.
“The safety of the patients is of paramount importance, and, therefore, the respondent Hospital has rightly not at all granted any relaxation to the Start-ups and MSMEs in the peculiar facts and circumstances of the case. The writ petition is, accordingly, dismissed,” the court said.
The court observed that the absence of relaxation was “not an unreasonable restriction keeping in view the peculiar nature of work” and “the petitioner cannot compare the earlier tenders in respect of other hospitals for the simple reason that there was no such exorbitant hike in the death rates in any other hospitals”.
The court ruled that since the petitioner was a trader with no innovation of any kind being involved in his “so-called start-up” there was no reason to interfere with the tender conditions. The Delhi government’s policy recognised start-ups that are working toward innovation, development, or improvement of products, processes, or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.
It further stated that the authority who floated the tender had sole discretion over how the tender conditions would be drafted. Unless and until the tender conditions are unreasonable, illegal, or specifically tailored to favour one person over another, the court’s ability to intervene is not at issue.
(With PTI inputs)
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