Start-Ups Can't Seek Relaxation Of Tender Conditions As A Matter Of Right, Especially In Field Of Healthcare: Delhi High Court

While dismissing a writ petition filed by a start-up supplier against Delhi govt's Rajiv Gandhi Super Speciality Hospital, a division bench of Chief Justice SC Sharma and Justice Subramonium Prasad held,

"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."

The executive instruction was issued by the Centre in March 2016, titled 'Relaxation of Norms for Startups and Micro & Small Enterprises in Public Procurement on Prior Experience – Prior Turnover Criteria.'

The Petitioner, a Start-up Company, alleged inaction on the part of the Delhi government in providing such relaxation. It submitted that its Rajiv Gandhi Super Speciality Hospital did not grant any such relaxation to Start-up/ MSMEs in two tenders recently issued by it for Contract of cardiology consumables.

No relaxation in respect of Annual Turnover Certificate, Past Experience and EMD/Bid security for Start-up Registered Company is given, it submitted.

The Petitioner argued that non-grant of relaxation is clearly arbitral and violative of Articles 14 and 19(1)(g) of the Constitution of India, and the petitioner has been denied level playing field.

The Hospital authorities on the other hand contended that the relaxations claimed by the Petitioner in view of Centre's guidelines are subjected to certain terms and conditions.

It submitted that in respect of procurement of items relating to public safety, health, critical security operations and equipment, the Procurement Department can certainly prefer the vendors having prior experience rather than giving order to new entities.

At the outset, the High Court noted that in the Rajiv Gandhi Super Speciality Hospital, there was an abnormally high rate of deaths in respect of heart patients. In less than one year period, 218 patients lost their lives, and in that drop-back in order to ensure supply of quality products/ quality implants from experience persons – only because element of human life was involved, the criteria in respect of Start-ups and MSMEs was not relaxed.

Thus, refusing to interfere with the tender process, the bench observed,

"The safety of the patients is of paramount importance, and, therefore, the respondent Hospital has rightly not at all granted any relaxation to the Startups and MSMEs in the peculiar facts and circumstances of the case."

It also rejected the comparison made by Petitioner with respect to relaxations granted by other hospitals like AIIMS, stating,

"The petitioner cannot compare the earlier tenders in respect of other hospitals for simple reason that there was no such exorbitant hike in the death rates in any other hospitals, and it has also been brought to the notice of this Court, while matter was being argued, that even writ petition has been filed in respect of the alarming hike in the deaths which have taken place in respect of heart patients in Rajiv Gandhi Super Speciality Hospital."

It concluded that framing of tender condition is the sole discretion of the authority who has floated the tender, and unless and until the tender conditions are arbitrary, or are contrary to any statutory provisions, or having tailored made to favour any individual, the question of interference by this Court does not arise.

Accordingly, the writ petition was dismissed.

Case Title: Triveni Healthcure Private Ltd v. GNCTD

Citation: 2022 LiveLaw (Del) 645

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