The court’s observations came on a petition by a registered start-up challenging the tender conditions imposed by a super-specialty hospital under the Delhi government for the procurement of stents, grafts, and valves for the Cardiology Department.
The petitioner claimed that while all other hospitals issued tenders for procurement which granted relaxations for start-ups and MSMEs with regard to turnover, past performance, and bid security, no such relaxation was given in the present case and the same was against the Centre’s start-up policy while also violating Articles 14 and 19(1)(g) of the Constitution of India.
Dealing with the issue raised in the petition, a bench headed by Chief Justice Satish Chandra Sharma said that although start-ups are promoted by the Centre as well as the Delhi government through their respective policies, the executive instruction under the Centre’s circular did not make it mandatory for any establishment to relax the condition in respect of turnover and prior experience while dealing with them.
“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.
The court noted that the hospital concerned was facing an abnormally high rate of deaths in respect of heart patients and it was in that drop-back that criteria for start-ups and MSMEs were not relaxed and the supply of quality products and quality implants from experienced persons 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 said that the Delhi government’s policy recognized start-ups that are working towards innovation, development, or improvement of products or processes or services or if it is a scalable business model with a high potential of employment generation or wealth creation and since the petitioner was a trader having no innovation of any kind being involved in his “so-called start-up”, there was no reason to interfere with the tender conditions.
It further stated that framing of tender conditions 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 the court does not arise.