Gujarat High Court
Adam vs Union
WPPIL/76/2011 63/ 63 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD WRIT PETITION (PIL) No. 76 of 2011 For Approval and Signature: HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA HONOURABLE MR.JUSTICE J.B.PARDIWALA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= ADAM B CHAKI - PETITIONER Versus UNION OF INDIA THROUGH SECRETARY & 5 - RESPONDENT ========================================================= Appearance : MR HASHIM QURESHI for PETITIONER : 1, MR PS CHAMPANERI for RESPONDENT : 1, None for RESPONDENT : 2,4 - 5. MR KAMAL B.TRIVEDI, ADVOCATE GENERAL with MR PK JANI, GOVERNMENT PLEADER with MS SANGEETA VISHEN, AGP for RESPONDENT : 3, MR SUDHIR NANAVATI, SR.ADVOCATE with MS ANUJA NANAVATI for RESPONDENT : 6, ========================================================= CORAM : HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA and HONOURABLE MR.JUSTICE J.B.PARDIWALA Date : 30/01/2012 CAV JUDGMENT
(Per : HONOURABLE MR.JUSTICE J.B.PARDIWALA) The present petition has been preferred by a resident of Bhuj, District Kutch, in the nature of a Public Interest Litigation, bringing to the notice of this Court the decision of the State Government to handover control and management of Sheth G.K.General Hospital, Bhuj, which is the only civil hospital at Bhuj, District Kutch, in favour of 'Gujarat Adani Institute of Medical Sciences' on a lease of 99 years for the purpose of developing the hospital as a teaching hospital including civil hospital and establishment of medical college on a 'Public Private Partnership' model subject to terms and conditions.
In this Public Interest Litigation, the petitioner has prayed for the following reliefs :
"(A) That this Hon'ble Court be pleased to admit and allow this petition and issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, quashing and setting aside Resolution dated 27th May 2009 bearing No.HSP/1007/ 3247/Part-2/A as the same is illegal, unconstitutional, in opposed to public policy, lacking transparency and suffering from procedural irregularity and smacks favouritism; and be pleased to quash and set aside the said Resolution and be pleased to direct the respondent-State Government to provide free medical aid to the public at large as was provided before the year 2001 and maintain the original status of G.K.General Hospital as civil hospital of the area.
(B) This Hon'ble Court be pleased to direct the respondent-State Government to produce before this Hon'ble Court proceedings of the contract entered into between the State Government and respondent no.6 and the accounts of Medical College run by respondent no.6 since 2009.
(C) This Hon'ble Court be pleased to direct the respondent-State Government not to hand over the management, possession of G.K.General Hospital, Bhuj to respondent no.6, pendingd admission and final disposal of the present petition, and till then the State Government be directed to provide free of cost medical services to the public at large as was provided hitherto.
(D) That any other and further reliefs as deemed fit and proper in the interest of justice be granted."
Facts relevant for the purpose of deciding this Public Interest Litigation can be summarised as under :
I. History of the Civil Hospital :
The subject matter of controversy in the present case is a civil hospital called 'Sheth G.K.General Hospital'. The said hospital was set up in the year 1956 at Bhuj with a donation of Rs.5 lac from a philanthropist late Sheth Gordhandas Kharshedji. The hospital was inaugurated by late Shri Jawaharlal Nehru, former Prime Minister of India on 17th August 1956. In the year 2001 the entire region of Kutch got destroyed on account of a massive earthquake. In the said earthquake, the entire hospital got collapsed. In June 2001 i.e. after a period of about six months from the date of devastating earthquake, former Prime Minister of India Shri Atal Behari Vajpayee released funds to the tune of Rs.100 crore from Prime Minister's Relief Fund for the purpose of rebuilding and modernisation of Bhuj General Hospital. On 31st March 2003, the new building of Sheth G.K.General Hospital, Bhuj came to be inaugurated. On 27th August 2003, a society called 'G.K.General Hospital Society' came to be formed and was registered under the Societies Registration Act, 1860 with the following members :
(i) Chief Minister of the State;
(ii) Minister for Health;
(iii) Chief Secretary of the State;
(iv) Principal Secretary, Health;
(v) Principal Secretary, Finance Department;
(vi) Principal Secretary, Energy Department; and
(vii) Additional Director, Medical Education.
On 4th November 2003, the State Government handed over management of the civil hospital to the said society. On 19th December 2003, the State Government issued a Government Resolution appointing an administrative committee to deal with the day-to-day administrative functions of 'Sheth G.K.General Hospital, Bhuj, which included three representatives of the Government of India: (1) A nominee of Secretary, Ministry of Health and Family Welfare, Government of India; (2) A nominee of Director General of Health Services, Ministry of Health and Family Welfare, Government of India; and (3) Financial Advisor, Ministry of Health and Family Welfare, Government of India.
On 19th February 2005 as the development of the new hospital was complete, the same was re-opened and a decision was taken to close down the old district hospital. The State Government has been extending requisite grants every year for managing the said hospital and the total amount so far disbursed for this purpose is about Rs.35 crore.
Record reveals that the State Government passed a resolution for closure of the old district hospital and for transfer of infrastructure to respective health centers including New G.K.General Hospital. Under the said resolution, additional activities irrespective of the status of Society run hospital, the following conditions were imposed:-
"(i) In case of poor patients who may not have BPL card, the Director will, at his discretion to provide free services.
(ii) The new hospital will provide medical treatment and ambulances service free of cost in all medico-legal cases and postmortem cases referred to that hospital.
(iii) The new hospital will provide medical treatment at free of cost to the prisoners whenever referred by the prison authorities to the hospital.
(iv) Whenever patients without attendant are referred to or brought to the hospital campus from either any NGO or sent by the Court of Law, the hospital have to provide them medical treatment at free of cost whenever necessary.
(v) The new hospital will provide second opinion in the cases of trauma, sickness, medical fitness etc. whenever referred in the hospital by the various State/Central Government departments/offices and also from the Court of Laws. These services will be provided free of cost to the concerned by the hospital."
II.
Decision making process :
Record reveals that on 4th September 2007, the State Government received a proposal from Narayan Hrudayalaya Institute of Cardiac Sciences, Bangalore for the purpose of managing the civil hospital as well as establishing and running a medical college. Simultaneously, a similar proposal came to be received from Manipal University, Manipal by the State Government. On 11th July 2008, similar proposal was put forward by respondent no.6 - M/s.Adani Group before the State Government.
On 29th August 2008, M/s.Adani Group made an application to the Medical Council of India for investing about Rs.125 crore in setting up a super specialty teaching hospital and the medical college. On 20th September 2008, the State Government, in its Health and Family Welfare Department, passed a resolution constituting a high-level committee for 'Public Private Partnership' projects in health sector. Such a resolution was necessitated because Government of Gujarat received proposals in 'Public Private Partnership' model in health sector and since the health projects differ in nature and technicalities from general infrastructure projects, a need was felt to setup a specific and transparent procedure to examine and scrutinize proposals regarding health projects in 'PPP' mode. It would be appropriate to quote the Resolution dated 20th September 2008.
"Constitution of High Level Committee for Public Private Partnership (PPP) Projects in Health Sector.
Government of Gujarat Health & Family Welfare Department Resolution no.HSP/1007/3247/A Sachivalaya, Gandhinagar Dated : 20 September, 2008 Resolution :-
The Government of Gujarat has received proposals in Public Private Partnership Mode in health sector. Since the health projects differ in nature and technicalities from general infrastructure projects, a need is felt to set up a specific and transparent procedure to examine and scrutinize and finalize proposals regarding health projects in PPP mode. In this regard, it was under consideration of Government to set up a high level committee.
2. After careful consideration, Government of Gujarat is pleased to set up a High Level Committee comprising the following members; namely, (1) Principal Secretary, Expenditure, Finance Department, Sachivalaya Chairman (2) Principal Secretary, Planning, GAD, Sachivalaya Member (3) Principal Secretary, Revenue Department, Sachivalaya Member (4) Principal Secretary, Health & Family Welfare, Sachivalaya Member-Secretary (5) Secretary, Legal Department, Sachivalaya Member (6) Chief Executive Officer, Gujarat Infrastructure Department Board, Gandhinagar Member
3. The terms of reference for the committee will be as follows:
(1)To examine Public Private Partnership proposals received in the department of Health & Family Welfare in context of state's need for health facilities;(2)
To analyze the detailed project report and other document received based on the preliminary scrutiny by Department of Health and Family Welfare;(3)
To decide criteria for the analysis of public private partnership proposals for Health Sector;(4)
To decide transparent procedure to be adopted for finalizing private partner;(5)
To decide the structure of PPP, extent of Government support, Government representation and benchmarks for minimum services levels to be maintained.
4. This issues with the concurrence of Finance Department dated 12-9-2008 Department's file of even number.
By order and in the name of Governor of Gujarat, (Mona Khandhar ) Joint Secretary to Government."
It appears from the materials on record that the high-level committee recommended a framework for setting up a medical college in the campus of G.K.General Hospital in partnership with interested private persons. As per the affidavit filed by Shri Kamlesh Shah, Under Secretary, Health and Family Welfare Department, Sachivalaya, Gandhinagar, dated 9th November 2011, a cabinet note, inter alia, indicating the details of various proposals of Narayan Hrudayalaya Institute of Cardiac Sciences, Bangalore, Manipal University, Mangalore and Adani Education and Research Foundation, Ahmedabad for establishing a medical college and running the hospital at Bhuj came to be circulated. The Committee noticed that Narayan Hrudayalaya Institute of Cardiac Sciences, Bangalore demanded annual grant of Rs.18 crore for running the hospital without any commitment to start a medical college, whereas Manipal University, Mangalore demanded for an annual grant of Rs.6 crore for running the hospital with 50% reservation of seats in favour of their university. As against this, the proposal of Adani Education and Research Foundation, Ahmedabad was found to be much more reasonable as M/s.Adani Group offered to upgrade the present civil hospital by increasing its capacity from 300 beds to 750 beds and also setting up of a super specialty teaching hospital with a medical college with annual intake of 150 students.
Ultimately, the State Government took decision to prefer Adani Group and, vide resolution dated 27th May 2009, decided to give the assets of G.K.General Hospital situated on the land of City Survey No.1053 of Bhuj admeasuring 1,14,288.84 sq.meters owned and possessed by the Health and Family Welfare Department to the Gujarat Adani Institute of Medical Sciences on a lease of 99 years subject to certain terms and conditions. We deem it fit and proper to quote the entire Government Resolution dated 27th May 2009.
"Upgradation of the G.K.General Hospital, Bhuj and establishment of a Medical College under Public Private Partnership Government of Gujarat Health & Family Welfare Department Resolution No.HSP/1007/3247/Part-2/A Secretariat, Gandhinagar Dated : 27th May, 2009 Read :-(1)
Health and Family Welfare Department's GR no.HSP/ 1007/3247/A, dated 4-11-2003 (2) General Administration Department's letter no.MPB/ 10/2009(21)/CU, dated 27-05-2009 Preamble :-
The property of the land of City Survey No.1053 of Mouje: Bhuj, Taluka : Bhuj, Dist.: Kutch, admeasuring 1,14,288.84 sq.meters with the buildings of G.K.General Hospital, Nursing School and the allied constructions is in the ownership and possession of the Health & Family Welfare Department. The operation and management of the G.K.General Hospital was entrusted to the G.K.General Hospital Society, Bhuj, a Society registered under the Societies Registration Act 1860, vide the resolution cited at preamble (1), and since then, the said Society has been managing the hospital.
The G.K.General Hospital has been making important contribution in providing primary health care services in the entire Kutch region. G.K.General Hospital is equipped with the building layout, new service system, costly and modern equipments, complete support services and machinery. The original project envisaged the establishment of a medical college in the border district of Kutch in the second phase of the project. It is essential and desirable that this medical college is operated with high-quality and efficient management, and a super specialty teaching hospital is established for providing high quality health care services in this interior area. Because of the policies of the State Government, there has been industrial development in the Kutch District. Over and above industrialization, in the Social Sector also, it is possible to create one nucleus structure by adopting the public-private partnership model in the health sector and for this purpose the infrastructure of this hospital can become one important centre point. If such super specialty teaching hospital is developed with public-private partnership, it can create excellent facility for medical tourism. By conversion of the hospital into a teaching hospital, the doctors will become available in adequate numbers and high quality medical services will become available at reasonable charges in and around the border district of Kutch and, more particularly, the poor and needy patients will get benefit of free medical treatment. Modern medical treatment for critical illnesses such as heart disease, kidney ailments and cancer will become available in the Kutch district and this services will further strengthen with the commencement of post graduate courses. The establishment of a new medical college in the Kutch district will also benefit the bright middle class students of Gujarat, who can not pay capitation fees. Thus, the people of Gujarat and, more particularly, the people of Kutch district can get substantial benefit if the operations of the G.K. General Hospital are carried out and a new medical college is established on public-private partnership model.
Under these circumstances, the matter of public-private partnership for managing the operations of the G.K.General Hospital, Bhuj and establishing a new medical college at Bhuj was under consideration of the Government for some time. The Government had received the proposals in this regard from the Narayan Hrudyalay Institute of Cardiac Sciences, Bangalore and the Manipal Group of Educational Institutions, Bangalore being managed by M.E.M.G. International India Pvt. Ltd. Of these proposals the Narayan Hrudyalay Institute of Cardiac Sciences, Bangalore had shown interest only in managing the said hospital, while the concessions demanded by Manipal Group of Educational Institutions from the State Government were not found reasonable and, hence, their proposal had become unacceptable. In the meantime, the Gujarat Adani Institute of Medical Sciences expressed its interest for undertaking the management of the G.K.General Hospital, Bhuj and for the establishment of new medical college on public private partnership model, and a Memorandum of Understanding was entered into for this purpose. It is estimated that the Gujarat Adani Institute of Medical Sciences will make an investment of Rs.150 crorers for the proposed medical college and for the administration and management of the G.K.General Hospital. Under this arrangement, this institute will provide high quality health care services to the people of Kutch by upgrading the G.K.General Hospital from the existing 300 beds to 750 beds. In view of the aforesaid, the proposal of establishment of new medical college at Bhuj by the Gujarat Adani Institute of Medical Sciences and handing over the operations of the G.K.General Hospital to the Gujarat Adani Institute of Medical Sciences on public private partnership model, was under active consideration of the Government.
Resolution :-
After careful consideration, the State Government has resolved, in principle, to give the assets of the G.K.General Hospital situated on the land of City Survey No.1053 of Bhuj admeasuring 1,14,288.84 sq.meters, which is owned and possessed by the Health & Family Welfare Department, to the Gujarat Adani Institute of Medical Sciences on a lease of 99 years for the purpose of developing the hospital as a teaching hospital including civil hospital and establishment of medical college on public private partnership model subject to the following conditions, after restoring to the Government the operations and management of the G.K.General Hospital from the G.K.General Hospital Society which is managing the same at present:
Conditions :-(1)
The status of the G.K.General Hospital will continue as that of the Civil Hospital and the Chief District Medical Officer in the hospital will be posted by the State Government and the required establishment under him will also be maintained, the expenses for which will be reimbursed by the State Government. This hospital will carry out the following functions as per the resolution of the Government of Gujarat, Health & Family Welfare Department, dated 19.2.2005:
(a) CDMO, at his discretion, can give free services to poor patients not having BPL card.
(b) The hospital will give free of charge ambulance service and medical treatment in all medico-legal and postmortem cases.
(c) The hospital will give free of charge medical treatment to the prisoners sent by the prison authorities.
(d) The hospital will also have to implement National Health Programmes such as R.C.H. Service, Pulse Polio, National Blindness Prevention Programmes, Rural Health Fares, Disability Certificate Workshops, Paraplegia Pension Scheme, Vaccination, Malaria Prevention, National Aid Control, A.N.C., P.N.C. from the available financial resources of the hospital.
(e) The hospital will provide free medical treatment to the patients brought to the hospital without attendant by any voluntary organization or a court of law.
(f) Kutch being the border district and also the largest district, if the hospital is designated as the Main War Base hospital, the hospital authorities will have to co-operate.
(g) The hospital will undertake, when considered necessary, regular supervision, inspection and interview for community Health Centres of the districts. The hospital will also undertake the task of providing required information for the questions of Loksabha, Rajyasabha and Vidhansabha and will also function as district level control room for epidemic emergencies.
(h) The hospital will give second opinion, free of charge, in the cases of trauma, illness, medical fitness, etc. referred to by the offices/departments of the State/Central Governments and a court of law.(2)
The Hospital Management Committee will be appointed under the Chairmanship of the Government nominee for carrying out the above functions and for the management of the hospital.
(3)Gujarat Adani Institute of Medical Sciences will independently manage the affairs of the medical college without any interference by the Hospital Management Committee referred to above, as the fee and admission will be subject to control by the autonomous committee appointed by the Government.
(4)At present, the hospital has a capacity of 300 beds and discharges the functions of District Civil Hospital, which include free treatment for the patients below poverty line and treatment at the charges prescribed by the Government of Gujarat for the other beneficiaries. Gujarat Adani Institute of Medical Sciences will continue to discharge these functions within the limits of the normative capacity of each of the functions and the allied functions such as OPD treatment, emergency medical treatment, ICU, etc. on the same basis. Further the hospital will continue to discharge the statutory and medico-legal functions of a civil hospital, for which the Government of Gujarat will appoint the required staff and will bear the expense on their salary, etc. Such staff will function under the direct control of the Health Department of the State Government.
(5)Gujarat Adani Institute of Medical Sciences will enhance the bed capacity by further 450 beds over a five-year period so that the requirement of the Medical Council of India is fulfilled every year for the new incoming batch of students in the medical college. Gujarat Adani Institute of Medical Sciences will be free to determine standards of service and charges for these 450 new beds together with all other services.
(6)Gujarat Adani Institute of Medical Sciences will enter into a Service Level Agreement with the Government of Gujarat for providing all hospital services to all categories of patients as per the Service Standards of the National Accreditation Board for Hospitals.
(7)At present, the staff appointed at the G.K.General Hospital consists of 156 Medical, Para-Medical & Ministerial staff and 49 nursing staff, who are the employees of the State Government. In addition there are 82 medical, nursing and technical staff under the Hospital Society and 10 employees on the establishment of Rogi Kalyan Samiti. The hospital is also taking services of 190 persons on outsourcing basis. Gujarat Adani Institute of Medical Sciences will continue to employ the Govenrment of Gujarat Staff as well as the contract-based staff for six months on their existing salary according to the Sixth Pay Commission scale, and give them an option, to be exercised in 6 months, whether they want to continue on deputation basis or want to return to the Government.
(8)Gujarat Adani Institute of Medical Sciences will provide for all Capital & Revenue Expenditure for the medical college. All income generated out of the Medical College has to be spent only on the development of the hospital.
(9)Gujarat Adani Institute of Medical Sciences will be responsible for all functions and administration of the G.K.General Hospital out of its own resources. However, operational expenses for maintaining 300 beds will be maintained separately and operational expenses for the remaining 450 beds will be computed separately. The contributions of the State Government will be subject to the upper ceiling based on the actual expenditure incurred by the Government of Gujarat for the Operation and Management of the Hospital during the year 2008-09. Taking the year 2008-09 as the Base Year, the Government will share the expenditure with the Gujarat Adani Institute of Medical Sciences for 300 beds. The expenditure for the remaining 450 beds will be borne by the Gujarat Adani Institute of Medical Sciences. The Government of Gujarat will give the expenditure to the Gujarat Adani Institute of Medical Sciences in this manner during the initial period of the project and the amount of assistance will gradually taper off over a period of time, and such assistance will be discontinued at one stage as may be determined. The amount of assistance will be computed on the basis of operational expenditure for 300 beds. However, a separate decision will be taken within the next 2 months on the quantum of assistance, the period for which such assistance should be given and conditionality of such assistance. As per the norms of Medical Council of India, for the approval for establishing a new medical college, it is imperative for the Gujarat Adani Institute of Medical Sciences to have 99 years' lease of the land of the G.K.General Hospital together with the property standing thereon. Thus, though a period of two months is required for deciding the details of financial conditions, it is essential to urgently transfer the hospital together with the entire land to the Gujarat Adani Institute of Medical Sciences.
(10)A Committee under the Chairmanship of the Principal Secretary (Finance Department) will give its recommendations within two months on some of the issues of the above mentioned conditions, such as the quantum of assistance, formula for computing the amount of such assistance from year to year, liabilities of the Gujarat Adani Institute of Medical Sciences as well as accounting/ financial conditions, which are yet to be decided.
(11)The present name of the G.K.General Hospital will continue and no change will be made therein in future for any reason whatsoever.
(12)The assets are transferred for specific objectives and if there is any change in the use of land, the land and assets thereon will automatically revert to the Government without any compensation and this transfer of land by way of lease and transfer of assets will be void ab-intio.
(2)This issues with the concurrence of the Finance Department dated 27/5/2009 on this department's file of even number.
By order and in the name of Governor of Gujarat Sd/-
Under Secretary Health and Family Welfare Department"
At this stage, we also deem fit and proper to state that on 26th May 2009 the Gujarat Adani Institute of Medical Sciences was registered as a registered society under provisions of the Societies Registration Act, 1860. Necessary Memorandum of Association and rules & regulations of the said Society were submitted to the office of the Registrar appointed under the Societies Registration Act. The Memorandum of Association is as under :-
"MEMORANDUM OF ASSOCIATION
1. Name of the Society:
The name of the Society shall be "Gujarat Adani Institute of Medical Sciences" (hereinafter referred to as "Society").
2. Registered Office:
The Registered Office of the Society shall remain in the State of Gujarat at such address as may be fixed by the Board of Governors from time to time and at present it is at "Adani House, Near Mithakhali Circle, Navrangpura, Ahmedabad 380009"
3. Objects :
The objects of the Society shall be :(1)
to develop patterns of teaching in undergraduate and postgraduate education in all branches of medicine, paramedicine, dentistry, nursing, physiotherapy, pharmacy, etc. so as to achieve a high standard of education in such branches;(2)
to bring together in one place educational facilities of the highest order for the training of personnel in all important branches of health activity;(3)
to undertake activities for the extension of knowledge in the field of Medical Sciences including dietics and nutrition; prevention of disease, community health and Scientific Research; and (4) to develop, run and manage hospitals and to provide quality health care services.
4. Functions :
With a view to promote the objects specified in Clause 3 above, the society may :-(1)
provide for undergraduate and postgraduate teaching in the science of modern medicine and other allied sciences, including physical and biological sciences;(2)
provide facilities for research including clinical research in various branches of such sciences;(3)
conduct experiments in new methods of medical education, both undergraduate and postgraduate, in order to arrive at satisfactory standards of such education;(4)
seek affiliation with one or more Universities as deemed fit;(5)
prescribe courses and curricula for both undergraduate and postgraduate studies;(6)
establish, acquire, manage and maintain :-
(a) one or more medical colleges with different departments including a department of preventive and social medicine sufficiently staffed and equipped to undertake not only undergraduate medical education but also postgraduate medical education in different subjects;
(b) one or more well-equipped hospitals;
(c) one or more dental colleges with such institutional facilities for the practice of dentistry and for the practical training of students as may be necessary;
(d) one or more nursing colleges sufficiently staffed and equipped for the training of nurses;
(e) rural and urban health organizations which will form centers for the field training of the medical, dental and nursing students of the Institute as well as for research into community health problems;
(f) other institutions for the training of different types of health workers, such as physiotherapists, occupational therapists and medical technicians of various kinds; and
(g) various facilities for promoting health tourism.(7)
acquire land and other immovable property by way of purchase or lease or in any other manner;
(8)hold examinations and grant degrees, diplomas and other academic distinctions and titles;
(9)create necessary posts and make appointments thereto on such terms and conditions as deemed fit;
(10)receive grants, gifts, donations, bequests and transfers of properties, both movable and immovable, from donors, benefactors, testators or transferors as the case may be;
(11)deal with any property belonging to, or vested in, the society in any manner which is considered necessary for promoting the objects of the society;
(12)demand and receive such fees and other charges as may be fixed from time to time;
(13)construct, acquire and manage required facilities like students' hostels, staff quarters, etc., as may be considered necessary for promoting the object of the society;
(14)borrow money for carrying out the objects of the society;
(15)cooperate and collaborate with schools, universities, institutions and other entities in any part of the world by exchange of students and teachers, conduct of joint research and education and/or training programmes and generally in such manner as may be conducive to attainment of its objects;
(16)disseminate information and knowledge through print, electronic or any other media including publication of books, journals, research papers or other literature or by conducting conferences, seminars, meetings, workshops, lectures, exhibitions, etc. (17) offer advisory services including consultancy to industry, professional bodies, Government and other agencies or individuals;
(18)make Rules and Bye-laws for the conduct of the affairs of the society and to add to, amend, vary or rescind them from time to time; and (19) do all such other acts and things as may be necessary to further the objects of the society."
The Board of Governors is as under :
The names, addresses, occupation and designation of the present members of the Board of Governors to whom the management of the Society is entrusted as required under Section 2 of the Societies Registration Act, 1860, are as follows :
Sr.No. Name Address Occupation Designation in Society
1.
Shri Gautam Shantilal Adani "Shantivan", B/h. Karnavati Club, Makarba, Ahmedabad.
Industrialist Chairman
2. Shri Rajesh Shantilal Adani 14, Suryajya Bunglows, Nr.Sarathi Restaurant, Vastrapur, Ahmedabad Industrialist Member (Nominee of AERF)
3. Shri Vasant Shantilal Adani 15, Suryajya Bunglows, Nr.Sarathi Restaurant, Vastrapur, Ahmedabad Industrialist Member (Nominee of AERF)
4. Smt. (Dr.) Priti Gautam Adani "Shantivan", B/h. Karnavati Club, Makarba, Ahmedabad.
Business Member (Nominee of AERF)
5. Dr.Bakul H.Dholakia 6, Asopalav Bunglows, Thaltej, Ahmedabad 380059 Educationist Member (Nominee of AERF)
6. Dr.Malay Mahadevia 12/B, Gyankunj Society, Opp. St.Xavier's College, Navrangpura, Ahmedabad 380009 Professional Member (Nominee of AERF)
7. Shri Ravi Saxena, IAS Bunglow No.19, Secretaries' Bunglows, Shahibaug, Ahmedabad Principal Secretary, Health & Family Welfare Dept. Member (Representative of Government of Gujarat)
8. Shri M.M. Shrivatsav, IAS K-503, Sector 20, Gandhinagar Principal Secretary, Finance Dept. Member (Representative of Government of Gujarat) Few relevant rules and regulations of Gujarat Adani Institute of Medical Sciences (for short, 'GAIMS') are as under :-
Membership :(1)
The Society shall for the time being consist of 11 (eleven) members, as follows :
(a) 6 (six) members including the Chairman nominated by the Adani Education and Research Foundation;
(b) 3 (three) members nominated by the Chairman in consultation with the Government of Gujarat; and
(c) 2 (two) members nominated by the Government of Gujarat.(2)
The first members of the society shall be the signatories of the Association Clause of the Memorandum of Association.
Board of Governors :
(1)The general superintendence, direction and control of the affairs of the Society shall be vested in the Governing Body of the Society, which shall be called the Board of Governors of the Gujarat Adani Institute of Medical Sciences, hereinafter referred to as "The Board".(2)
The first Board shall consist of the members as per clause 5 of the Memorandum of Association and shall hold office for a maximum period of five years from the date of registration of the society. Subsequently, the Board shall be composed as set out hereunder :
(a) Chairman of the Adani Education and Research Foundation shall be the Chairman of the Board.
(b) Five members (other than the Chairman) nominated by the Adani Education and Research Foundation.
(c) Two representatives of the Government of Gujarat, one each from the Health & Family Welfare Department and Finance Department of Government of Gujarat.
(d) Not more than three independent professionals to be appointed by the Chairman in consultation with the Government of Gujarat for a term not exceeding three years. Such professionals will be from the field of medicine, health care, hospital management or education.
(e) Secretary of the Society will be the ex-officio Secretary of the Board.
Power of the Board of Governors :
Subject to the provision of the Memorandum, the Board of Governors shall have the powers :(1)
to prepare and execute detailed plans and programmes for attaining the objects of the society and to carry on its administration and management;(2)
to receive funds, donations, gifts and subscriptions and to have custody of the funds of the society;(3)
to approve the budget estimates of the society for each year;(4)
to prescribe and conduct courses of study, training and research;(5)
to prescribe rules and regulations for the admission of candidates to the various courses of study;(6)
to lay down standard of proficiency to be demonstrated before the award of diplomas, certificates and other distinctions in respect of the courses offered by the society;(7)
to institute and award fellowships, scholarships, prizes and medals;(8)
to provide for and supervise the residence, health, discipline and the well-being of the students of the society;(9)
to create teaching, administrative, technical, ministerial and other posts under the society and to make appointments thereto;(10)
to cooperate with any other organization to further the objects of the society;(11)
to enter into arrangements for and on behalf of the society;(12)
to sue and defend all legal proceedings on behalf of the society;(13)
to appoint Committees for the disposal of any business of the society or for tendering advice in any matter pertaining to the society;(14)
to delegate to such extent as it may deem necessary, any of its powers to any officer or Committee of the society;(15)
to consider and pass such resolution on the annual report, the annual accounts and the financial estimates of the society or any of its constituents as it thinks fit;(16)
to make, adopt, amend, vary or rescind from time to time Rules and Bye-laws for the regulation of and for any purposes connected with the management and administration of the affairs of the society and for the furtherance of its objects;(17)
to perform such additional functions and to carry out such duties as may be necessary to achieve the objects of the society.
Funds of the Society :(1)
The Society shall maintain a Fund to which shall be credited;
(a) all money provided by the State/Central Government;
(b) all fees and other charges received by the society;
(c) all moneys received by the society by way of grants, gifts, donations, bequests or transfers; and
(d) all moneys received by the society in any other manner or from any other source.(2)
All moneys credited to the Fund shall be deposited in such banks or invested in such manner as the society may decide.
(3)The Fund shall be applied towards meeting the expenses of the society including expenses incurred in the exercise of its powers and discharge of its functions;
Dissolution :
At any time, if it is found that the affairs of the society cannot be carried on, either because it has survived its usefulness, or because sufficient support is not forthcoming or for any other reason, the Board may by a majority of three fourths of its members, recommend the winding up of the Society at its meeting specially called for that purpose. The society shall not be wound up except by a clear majority of three fourths of its members voting at the special meeting.
Should it be decided to wind up the Society as aforesaid, its property remaining after the satisfaction of its debts and liabilities shall not be paid or distributed amongst the Governing Body but shall vest in the Government of Gujarat and all leases made in favour of the Society shall be deemed to have expired.
Record reveals that as the State Government decided to take back the management of G.K.General Hospital from G.K.General Hospital Society, Bhuj, a resolution came to be passed on 16th June 2009, which is as under :-
"Resolution Whereas the State Government has decided to take back the management of the G.K.General Hospital from the G.K.General Hospital Society, Bhuj registered under the Society Registration Act, 1860 and to hand over the management of the said Hospital to the Gujarat Adani Institute of Medical Sciences under public private partnership mode, And whereas the State Government has also decided to establish a medical college at Bhuj under public private partnership with the Gujarat Adani Institute of Medical Sciences, And whereas 3/5th of the seven members of the G.K.General Hospital Society, Bhuj are empowered under section 13 of the Society Registration Act, 1860 to dissolve the said Society in view of the reasons cited above, Now, therefore, be it resolved that the G.K.General Hospital Society, Bhuj stand dissolved forthwith.
In witness whereof the following members of the G.K.General Hospital Society, Bhuj have affixed their signature on the day of June, 2009.
Sr. Members of Society Designation Signature 1 Hon'ble CM Chairman 2 Hon'ble Minister, Health Member 3 CS Member 4 PS, Health Member 5 PS, FD Member 6 PS, Energy Department Member 7 Additional Director, Medical Education Member On 13th July 2009, the Ministry of Health and Family Welfare, Government of India was pleased to issue Letter of Permission under Section 10-A of the Indian Medical Council Act, 1956 in favour of Gujarat Adani Institute of Medical Sciences Society for establishment of new medical college at Bhuj with effect from the academic year 2009-10.
After a period of almost two years from the date the Ministry of Health and Family Welfare, Government of India granted permission for establishment of new medical college, the petitioner preferred the present petition challenging the legality and validity of Notification dated 27th May 2009, whereby the State Government took decision to handover G.K.General Hospital to GAIMS on a lease of 99 years for the purpose of developing hospital as a teaching hospital including civil hospital and establishment of medical college on 'PPP' model.
On being prima facie satisfied with the bonafides of the petitioner and also with the public interest involved in the matter, the Division Bench of this Court for the first time on 8th July 2011 issued notice to the respondents directing the State and its officials to file reply affidavit. The order dated 8th July 2011 is as under :-
"This appears to be a serious issue as it appears that for allowing respondent no.6 to open a medical college, the management of one of the hospitals of the State Government has been given to respondent no.6 in the name of "Public Private Partnership". There is nothing on the record to suggest that any such notice was issued inviting other experts in the field of Medicines to manage the Government hospital on the basis of "Public Private Partnership".
The case is that, the agreement for management of Hospital on the basis of "Public Private Partnership" has been made with a view to enable respondent no.6 to get permission to open a medical college, otherwise respondent no.6 cannot get permission to open a medical college without a hospital.
Let notice be issued on respondents. Learned counsel Mr.P.S.Champaneri and learned AGP Mrs.Krina Calla accepts and waives notice on behalf of respondent nos.1 & 2 and respondent nos.3,4 & 5 respectively. Direct notice on respondent no.6 is permitted through Court and by speed post.
Counsel for the appellant will serve two copies of the paper book on each of the counsels by 11th July 2011.
The State and its officials are directed to file reply affidavit giving details of the offer, if any called for and submitted by any other reputed hospitals, medical colleges or institutions from within the State and outside the State of Gujarat.
Respondent no.6 will file specific reply within two weeks and state whether they will charge any amount from the Outdoor and Indoor (admitted) patients of the Hospital. It is expected that no charge will be made from the Outdoor and Indoor patients of the Hospital, as the Hospital belongs to the State which is to be managed by respondent no.6. Agreement, if any, reached by the State Government with respondent no.6 should be produced by the next date.
Post the matter on 26th July 2011 within ten cases.
During the pendency of the writ petition, the respondent - State Government will not handover the management of the hospital in question in favour of respondent no.6, if not yet handed over."
The matter was heard from time to time and on 28th July 2011 an additional affidavit on behalf of respondent no.6 was filed highlighting further measures and steps which respondent no.6 intended to give in the form of more benefits to the people of Gujarat. The same are as under:-
"(i) The existing status of the Civil Hospital in respect of the existing 300 beds will continue to provide the medical services as used to be given by the State Government to the citizens of the State and as per the agreement reached between the State of Gujarat and the 6th respondent.
(ii) Apart from the 300 beds, the 6th respondent will provide additional 400 beds in due course of time at an approximate cost of Rs.30 crores to the benefit of the people of the State.
(iii) Apart from the benefits to which citizens of the State were entitled for treatment in the Civil Hospital in question against 300 beds, following additional benefits will be provided to certain categories of patients mentioned below:-
(1) No separate charge will be taken for bed, (2) No separate charge will be taken for any treatment including operation, investigation and medicines and free treatment, operation, investigation and medicines shall be supplied to the indoor patients.
The aforesaid benefits will be limited to the following categories of other patients, viz.
(a) BPL cardholders,
(b) Other poor patients not holding BPL cards, who have been certified by CDMO who deserve free medical services,
(c) Gujarat State Government employees posted within the State of Gujarat,
(d) Employees of High Court, District Courts and other Courts of the State of Gujarat,
(e) Retired armed forces including BSF residing within the State of Gujarat.
(iv) This apart, the medical college students admission of 10% quota of management will be released for admission of local students of Kutch District, if they come out successful in any entrance test irrespective of their position in the merit list."
On 17th August 2011, the Division Bench passed a further order, which reads as under :-
"An additional affidavit is filed on behalf of the 6th respondent. In paragraph 2 of the affidavit, the 6th respondent has stated the benefits they intend to give, as under:
"2. I state and submit that in addition to the conditions, measures and steps which are required to be taken by Respondent No.6 under the Resolution dated 27.5.2009 upon taking over the GK General Hospital, Bhuj (hereinafter referred to as the "Civil Hospital"), and while maintaining its status as a Civil Hospital/General Hospital, the following further measures and steps will be taken by and on behalf of Respondent No.6 as part of its social and managerial commitments to sub serve the public interest;
I. The existing capacity of the Civil Hospital at 300 beds will not only be continued as such, but additional 450 beds would be added in due course of time at an approximate cost of Rs.30/- Crores to benefit the people of the District of Kutch.
II. The existing status of the Civil Hospital in respect of existing 300 beds to provide free medical services to poor patients holding BPL card as also other poor patients not holding BPL Card but certified by CDMO to deserve free medical services, will continue to be provided the same in the best possible manner and at high professional standards.
III. To this group of people entitled to free medical services in the Civil Hospital will be added the following groups of people:
a) Employees of the State and Central Government working in Kutch District (Class IV, III and II employees in that order);
b) Employees working in Courts in Kutch District;
c) Retired Personnel of the Armed Forces including BSF.
IV. The persons referred in sub-paragraphs II and III above will also be provided additional medical services free of cost as may be recommended by the concerned Doctors and certified by the CDMO in the form of free diagnostic, blood and physical investigations, operations/surgeries and medicines to indoor patients.
V. Respondent No.6, upon expansion of the facilities in the Civil Hospital, will make available, inter-alia, medical facilities for diagnosis and treatment in the fields of Cardiac, Nephrology, Oncology, Neurology, Orthopedic, Biliary Sciences [Liver] and Internal Medicine over a period of time to make the Civil Hospital a multi-specialty health centre.
VI. Respondent No.6, as part of its social commitment, set up a medical college with an intake capacity of 150 students per annum since the academic year 2009-10, and the total outlay envisaged for creating an institute of excellence and improvement of the Civil Hospital is approximately Rs.125/- Crores, out of which approximately Rs.62/- Crores have already been spent including Rs.6/- Crores towards upgrading the existing Civil Hospital. Once the Civil Hospital comes under the Management of Respondent No.6, the Hospital and the Medical College will complement and supplement each other to better the health services in the Hospital on account of availability of a large pool of Students, Residents and Interns, while the medical college will benefit with the availability of increased number of patients to provide sufficient exposure and opportunity to the students to learn and sharpen their skills as future doctors.
VII. Respondent No.6 will maintain the Civil Hospital with high standards by engaging services of qualified doctors, nurses and support staff. It will also maintain standards of cleanliness and hygiene in day to day running of the Hospital for all 750 beds and will continue to not only maintain the existing infrastructure in good condition but will enhance the same by appropriate maintenance, repairs, additions and alterations to provide a fine hospital.
VIII.As part of its commitment, Respondent No.6 further agrees to surrender hereby 10% seats reserves for management quota [15 seats] to the Admission Committee for Professional Medical Education Courses in Gujarat in favour of meritorious students Domiciled in Kutch District from the list of candidates who have passed the Common Entrance Examination for MBBS admissions in the State of Gujarat. Respondent No.6 has already agreed to abide by the process of admission and scale of Fees that may be fixed by the State Government in the State of Gujarat for 75% Govt. quota students and has also undertaken that it will plough back surplus, if any, from the medical college for financing the deficit of the Civil Hospital and development of the Hospital infrastructure.
IX. Respondent No.6 has undertaken free multi diagnostic medical health check up camps in diverse villages in Kutch District, during 2010-2011 and will continue to do so in future to provide free medical check up followed by appropriate treatment in Civil Hospital to all deserving persons belonging to above mentioned groups."
In view of the above, a prayer has been made to modify the interim order passed on 8th July 2011 by directing the State Government to handover the possession of the Civil Hospital to the 6th respondent.
Post the matter on 25th August 2011 within five cases."
During the course of hearing this Court felt that presence of Medical Council of India is necessary for better adjudication of the controversy and, therefore, the following order was passed :-
"Petitioner is directed to add Medical Council of India as a party respondent. Since Mr. Rutvij Bhatt must be appearing on behalf of the Medical Council of India, let a copy of this application in advance may be served upon Mr. Bhatt so that the matter can be taken up for further hearing on next Thursday, December 22, 2011.
Let it be recorded that Mr. Bhatt should take instruction as to whether for the purpose of giving recognition to a medical college run under the joint venture in accordance with the provisions of the Gujarat Infrastructure Development Act, 1999, it is sufficient if land is in possession and owned by one of the members of the joint venture, which in the present case is State of Gujarat. Let this order be immediately served upon Mr. Rutvij Bhatt. Let this matter appear on next Thursday December 22, 2011 within first five matters."
Ordinarily, court would allow litigation in public interest if it is found :
That the impugned action is violative of any of the rights enshrined in Part III of the Constitution of India and relief is sought for its enforcement;
That the action complained of is palpably illegal or mala fide and affects the group of persons who are not in a position to protect their own interest on account of poverty, incapacity or ignorance;
That the person or a group of persons were approaching the Court in public interest for redressal of public injury arising from the breach of public duty or from violation of some provision of the Constitutional law;
That such person or group of persons is not a busy body of meddlesome inter-loper and have not approached with mala fide intention of vindicating their personal vengeance or grievance;
That the process of public interest litigation was not being abused by politicians or other busy bodies for political or unrelated objective. Every default on the part of the State or Public Authority being not justiciable in such litigation;
That the litigation initiated in public interest was such that if not remedied or prevented would weaken the faith of the common man in the institution of the judiciary and the democratic set up of the country;
That the State action was being tried to be covered under the carpet and intended to be thrown out on technicalities;
Public interest litigation may be initiated either upon a petition filed or on the basis of a letter or other information received but upon satisfaction that the information laid before the Court was of such a nature which required examination;
That the person approaching the Court has come with clean hands, clean heart and clean objectives;
That before taking any action in public interest the Court must be satisfied that its forum was not being misused by any unscrupulous litigant, politicians, busy body or persons or groups with mala fide objective of either for vindication of their personal grievance or by resorting to black-mailing or considerations extraneous to public interest.
We have heard learned advocate Mr.Hasim Qureshi appearing for the petitioner, learned Assistant Solicitor General of India Mr.P.S.Champaneri for respondent no.1 - Union of India, learned Advocate General Mr.Kamal B.Trivedi appearing with learned Government Pleader Mr.P.K.Jani with learned AGP Ms.Sangeeta Vishen for respondent nos.3 and 4 and learned senior counsel Mr.Sudhir I.Nanavati appearing with learned advocate Ms.Anuja Nanavati for respondent no.6.
III.
Contentions on behalf of the petitioner :
Counsel for the petitioner vehemently submitted that the decision of the State Government to handover the assets and management of the civil hospital at Bhuj is against public interest and such a huge property of the ownership of the State Government almost worth more than Rs.100 crore could not have been given away to a private respondent i.e. GAIMS.
He has submitted that since 2009 the poor, downtrodden and illiterate class of society residing in the region of Kutch is deprived of proper medical services inspite of the fact that the hospital was run by a registered society. Prior to 2011 in the old hospital all kinds of medical services were provided free of cost to all citizens irrespective of the fact whether one holds BPL card or not. Learned counsel has expressed deep concern and a strong apprehension that if the management of the hospital is handed over to private companies like respondent no.6, then the situation would go from bad to worst and the poor people will not receive free medical services.
He further contended that there is no transparency in the decision of the State Government to handover the management of the civil hospital in favour of respondent no.6. He has submitted that the State Government should have issued a public notice inviting offers from various colleges and hospitals all over the country and thereafter decision should have been taken. He has submitted that no such procedure has been followed and the State Government has simply obliged respondent no.6 by handing over the possession and management of the civil hospital.
He vehemently submitted that the entire premises belongs to the State Government and the new hospital was constructed at the cost of Rs.100 crore released from Hon'ble Prime Minister's Relief Fund in the year 2001. He has submitted that respondent no.6 has not invested a single rupee and property worth crores of rupees could not have been handed over for its management to a private respondent and that too on 'Public Private Partnership' basis for a period of 99 years. He alleged that such a deal is nothing but cheating with the public at large.
Learned counsel relied upon decision of the Supreme Court in the case of Akhil Bhartiya Upbhokta Congress v/s. State of Madhya Pradesh and others, reported in (2011)5 SCC 29. He has relied upon this decision as the Supreme Court has observed that the State and/or its agencies/instrumentalities cannot give largesse to any person according to the sweet will and whims of the political entities and/or officers of the State. Every action/decision of the State and/or its agencies/ instrumentalities to give largesse or confer benefit must be founded on a sound, transparent, discernible and well-defined policy, which shall be made known to the public by publication in the Official Gazette and other recognised modes of publicity and such policy must be implemented/executed by adopting a non-discriminatory and non-arbitrary method irrespective of the class or category of persons proposed to be benefited by the policy. The distribution of largesse like allotment of land, grant of quota, permit licence, etc. by the State and its agencies/ instrumentalities should always be done in a fair and equitable manner and the element of favouritism or nepotism shall not influence the exercise of discretion, if any, conferred upon the particular functionary or officer of the State.
He, therefore, strenuously urged that the Resolution dated 27th May 2009 passed by the Health and Family Welfare Department, State of Gujarat, deserves to be quashed and set-aside and the State Government must be restrained from transferring the assets of civil hospital including the management in favour of respondent no.6.
IV.
Contentions on behalf of the Union of India :
Learned Assistant Solicitor General of India Mr.P.S.Champaneri vehemently submitted that he is supporting the Public Interest Litigation. He has submitted that there is complete lack of proper transparency while taking the decision to handover the hospital to GAIMS for the purpose of starting a medical college as funds to the tune of Rs.100 crore has been spent from Prime Minister's Relief Fund in rebuilding and modernisation of Bhuj General Hospital.
He has submitted that the Union of India supports the Public Interest Litigation in the interest of propriety as the Secretary (Health), Government of India and the Director General of Health Services, Government of India were not consulted before changing the working structure of the hospital despite the fact that they were Members of the original Governing Council of the Hospital.
He has submitted that G.K.General Hospital Society which was formed under the Societies Registration Act, 1860 came to be dissolved by the State Government under very suspicious circumstances. He has submitted that the said decision of dissolution of the Society was unilateral, which came to the notice of the Union of India only from the affidavit-in-reply filed by the State of Gujarat.
He has submitted that the action of dissolution of the Society by the State Government is unilateral, the action of taking a decision to handover the management of the hospital to GAIMS is also unilateral and without any consultation with the Government of India.
Mr.Champaneri relied on a decision of the Supreme Court in this regard in the case of M/s.Kasturi Lal Lakshmi Reddy v/s. The State of Jammu and Kashmir and another, reported in AIR 1980 SC 1992. Relying on this judgment of the Supreme Court, Mr.Champaneri vehemently submitted that the Government in dealing with the public, whether by entering into contracts or granting other form of largesse, the Government cannot act arbitrarily at its sweet will. Every activity of the Government has a public element in it and it must therefore, be informed with reason and guided by public interest. If the Government awards a contract or leases out or otherwise deals with its property or grants any other largesse, it would be liable to be tested for its validity on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid.
V. Contentions on behalf of the State Government :
Learned Advocate General Mr.Kamal B.Trivedi submitted that the State has always endeavoured to see that the condition of health services being provided to its citizens of the State is improved and for the same it is incumbent on the State Government to see that better facilities as regards the infrastructure, clinical and operational services, are provided in Government hospitals and, therefore, the State Government took a policy decision to enter into 'Public Private Partnership' projects in health sector vide a Government Resolution dated 20th August 2008. He has submitted that since 2001 establishment of a medical college was on the agenda of the State Government but the same was not got materialized. He has submitted that even before re-opening of the civil hospital in March 2005 extensive consultation was undertaken with an expert Dr.Tushar Lakhia, a renowned expert and consultant in the field of Hospital Management, Ahmedabad. The expert was consulted for the purpose of achieving a twin object of effectively managing the civil hospital as well as for starting medical college.
Learned Advocate General brought to our notice a report which was submitted by the expert in August 2003, which reads as under :-
"5.12.A Observations:
* As a part of phase-2 of the project of G.K.General Hospital, Medical Colleges included.
* As shown in chapter-2 Table-7, medical college with 100 annual admission is recommended instead of 50 admissions because there is only marginal difference in the expenses (Rs.80,88,000).
* Option of self finance medical college will generate additional revenue of Rs.2,58,75,000 (Additional 50 seats at Rs.1,50,000 per annum).
* The option of government medical college the G.K.General Hospital and Prefab Hospital fulfills the hospital requirements for 100 beds.
* The expenses of the medical college and a teaching hospital Rs.13 to Rs.18 crores from first to fifth year for government institution.
* The expenses for the self finance medical college option are the same but revenue generation from hospital service e charges and student's fees will reduce the deficit to Rs.11 crores from first to fifth year.
* Medical college is the requirement of the area of Kutch as there is no medical college in the whole of North Gujarat, nearing Saurashtra and Kutch.
* Every year about 25 to 30 students from Kutch have admissions in different medical colleges of the State and outside the State. (Private Medical Colleges).
5.12.B. Recommendations:
* A medical college with 100 admission is recommended.
* Generation of revenue from tuition fees of students if recommended.
* Self-finance medical college option is viable as many students from Bhuj and Kutch are opting for admission in self-finance medical colleges.
* Government medical college and a teaching hospital can consider different options for reduction in expenditure as follows:
Options for reduction of expenses at G.K.General Hospital (Teaching) Options Subject Alternatives
1.
CL-1 & 2 Full time practicing, Contractual, Part-time and Honorary teaching staff. (Reducing the expenditure upto 50%)
2. CL-4 Outsourcing by contract (reducing staff requirement)
3. Medicines & Disposables In House pharmacy supply at subsidized rates
4. Electricity Audit for Electricity & Energy use.
5. Maintenance Good Maintenance & Security Department.
* A special favour status from Government of India for people of Kutch by a resolution and order of Department of Health and Family Welfare of Union Government is necessary for relaxation of MCI norms for staffing and other requirements to implement option-1 in above table.
* The Government Medical College by associating with autonomous super-specialty institutes like SGPGI, Lucknow, AIIMS, New Delhi, PGI, Chandigarh will serve the dual objective of high standard of medical education and super-specialty services."
He further submitted that the allegation levelled by the petitioner and the Union of India that there has been no transparency is absolutely baseless and contrary to the materials on record. He has submitted that Narayan Hridayalaya Institute of Cardiac Sciences, Bangalore and Manipal University, Mangalore were also considered before taking decision to enter into an agreement with respondent no.6. However, the terms and conditions which were put forward by the two institutions were not reasonable and, therefore, the State Government rejected their proposals.
Learned Advocate General brought to our notice the provisions of Section 10-A of the Gujarat Infrastructure Development Act, 1999. Under the said provisions, the State Government is empowered to select a developer by direct negotiation, more particularly, for the project to provide social services to the people. He explained to us that it was under these circumstances that it was initially thought fit to entrust the property of the civil hospital to respondent no.6 under the concession period of 35 years. However, thereafter, it was noticed that as required by the provisions of the Medical Council Act and the regulations made thereunder the concerned applicant must possess 25 acres of land having a lease of 99 years. As a result, it was decided in principle to entrust the property on the basis of lease of 99 years. He has submitted that in view of this, after careful consideration, the State Government resolved in principle to give the assets of the civil hospital to respondent no.6 for the purpose of managing and developing the civil hospital and also for establishing and running a medical college on 'PPP' model subject to various terms and conditions, which came to be decided in the form of Government Resolution dated 27th May 2009.
Mr.Kamal Trivedi, learned Advocate General also submitted that the Government Resolution dated 27th May 2009 provides for the appointment of the Hospital Management Committee under the Chairmanship of the Government nominee for managing the civil hospital. It also stipulates that respondent no.6 will provide for all capital and revenue expenditure for the medical college and that all income generated out of the medical college would be spent only on the development of the civil hospital. It further provides that in case of change in use of the leased property by respondent no.6, the land and the assets thereon will be taken back by the Government without any compensation.
Mr.Trivedi also vehemently submitted that the Government has taken care to see that upon transfer of management, the 300 bed civil hospital shall continue in the same form and in the same manner including the same system of free treatment or charges as are being presently collected by the State Government and the civil hospital shall benefit with the improvised services which respondent no.6 has undertaken to provide. Mr.Trivedi also submitted that upon transfer of management of the civil hospital the required capital as well as routine maintenance expenditure will be borne by respondent no.6. He has submitted that thereby the State Government will save crores of rupees every year. At the same time, the State Government has put stringent conditions to ensure that there is no compromise with the medical treatment being given to the resident of District of Kutch. The nominee of the State Government will head a managing committee for managing the affairs of the civil hospital. Mr.Trivedi submitted that the State Government has ensured that the status of the civil hospital will continue irrespective of change in management.
Mr.Trivedi also vehemently submitted that the allegations of favouritism as levelled by the petitioner are absolutely baseless and have been levelled with an oblique motive. Mr.Trivedi submitted that when the establishment of the medical college was conceived in 2001, respondent no.6 was not at all in picture. It cannot be said that the whole project was envisaged keeping respondent no.6 in mind. He gave an instance of Wockhardt Hospital Limited. In past, the State Government had also involved Wockhardt Hospital Limited for managing the civil hospital at Palanpur on 'PPP' basis. He brought to our notice that this decision of the State Government was a subject matter of challenge in a Public Interest Litigation being Special Civil Application No.25333 of 2007. In the said Special Civil Application No.25333 of 2007, the State Government explained to the Hon'ble Court by way of a detailed affidavit as regards the justification for doing so including the idea of taking care of poor people, BPL card holders and others for qualitative medical treatment. Ultimately, the Division Bench of this Court vide order dated 20th November 2008 dismissed the said public interest litigation.
Learned Advocate General lastly submitted that the whole project is, in fact, in public interest. Respondent no.6 has been chosen only to implement the project. The project is going to be implemented on the basis of principle of 'Public Private Partnership'. He has submitted that there is going to be no vesting of land, therefore, the contention as regards the colourable exercise of power is without any merit. The State gains advantage from establishing medical college as well as improved infrastructure with better medical facilities without any burden on the Government and it is for the benefit of the general public.
VI.
Contentions on behalf of respondent no.6 :
Learned senior counsel Mr.Sudhir I.Nanavati contended that the petitioner has no locus standi to file the present petition under Article 226 of the Constitution of India behind the veil of public interest litigation. No real and genuine public interest is espoused in the petition. He has also submitted that the present petition is an abuse of the process of the Court. The petition is deliberately kept vague and that the petitioner has deliberately made false statements. The petitioner has suppressed material facts for ulterior purposes and motives and that the petition suffers from delay and laches.
Mr.Nanavati also submitted that the petition though styled as public interest litigation, is nothing but a camouflage for personal disputes and vendetta and has been filed for oblique considerations wearing the mask of public interest litigation. He has submitted that Shri.Adam Chaki - the petitioner describes himself as a political leader, however, the petitioner has misused his political position and has tried all means and ways to malign the image of the answering respondent and its members. The petitioner has on several occasions tried to take law into his hands and, in fact, a criminal case being First Information Report I-40/2010 is also registered against him for damaging the properties of G.K.General Hospital, Bhuj. The respondent has been informed that the petitioner was arrested in connection with this offence. The petitioner has filed the present petition for ulterior purposes and motives and with a view to generate adverse publicity against the answering respondent to wreck private vengeance.
Learned counsel also submitted that the present petition challenges the resolution dated 27th May 2009 while the petition is filed only in July 2011. The present Writ Petition is, therefore, grossly delayed. The petitioner who claims to be a respectable leader of a political party does not even offer any explanation or justification for such a delay. He has relied upon the decision of the Hon'ble Supreme Court in the case of Netai Bagh v/s. State of West Bengal, reported in (2000)8 SCC 26, wherein the Supreme Court had dismissed the Writ Petition styled as a Public Interest Litigation on the ground of delay by holding as under :
"26.
The inaction of the appellants in approaching the Court, almost after three years of the impugned lease deed is an additional circumstance to doubt their bonafides in challenging the impugned action. During the pendency of the litigation between the parties, a huge project has actually, by now, come into existence where the production has also commenced. Respondent no.5 is claimed to have spent a sum of Rs.73.01 crores as of 30-10-1999 on the project. Interference at this stage will not only adversely affect the business of respondent no.5 but would also render a large number of people unemployed and deprive the State its cherished desire of developing the industrial growth."
He has submitted that the Hon'ble Court had, vide order dated 8th July 2011, directed respondent no.6 to specify as to whether respondent no.6 will charge any amount from the outdoor and indoor (admitted) patients of the hospital. Clarifying this, Mr.Nanavati submitted that respondent no.6 will run 300 bedded G.K.General Hospital, Bhuj and provide free services to poor patients who are not having BPL (Below Poverty Line) cards at the discretion of the Chief District Medical Officer (CDMO). He has submitted that the said condition, even otherwise, is a part of the resolution dated 27th May 2009. He, thereafter, submitted that in order to provide educational services to the public at large, Adani Group has set up Adani Education and Research Foundation, a registered society under the Societies Registration Act, 1860 and also a public trust registered under the Bombay Public Trusts Act, 1950. The main object of AERF is to promote education in various branches of knowledge and to establish and manage academic institutions. With a view to cater the crucial need of providing managerial talent and imparting appropriate training and skill development services to the organizations directly or indirectly associated with the infrastructure and related sectors, AERF established first unique educational institution known as the Adani Institute of Infrastructure Management.
He has also submitted that Adani Group has also established another educational institution, namely, Adani Vidya Mandir in Ahmedabad for upliftment of underprivileged children for providing free education to meritorious students and coming from challenging economic background at a capital cost of Rs.35.31 crore. He submitted that the entire expenditure of school fees, books and stationery, food, school dress and shoes, transportation, etc. is solely borne by Adani Foundation. He submitted that Adani Foundation is contributing almost Rs.2.65 crore per year towards maintenance and administration of Adani Vidya Mandir. Apart from this, Adani Group, through Adani Foundation, has undertaken various socio-economic activities for providing better health, education and infrastructural facilities. Adani Group is giving contribution for these activities being carried out by Adani Foundation. He has submitted that a society namely Gujarat Adani Institute of Medical Sciences was formed as a Public Private Partnership venture between the Adani Education and Research Foundation and the Government of Gujarat. He submitted that GAIMS is a society registered under the provisions of the Societies Registration Act, 1860. The objects of GAIMS are, inter alia, to undertake activities for the extension of knowledge in the field of Medical Sciences including dietics and nutrition; prevention of disease, community health and scientific research;
to develop, run and manage hospitals and to provide quality health care services.
He submitted that a committee of 11 members who run, administer and supervise the hospital is consisting of 6 members of the AERF, 3 members nominated by the Chairman in consultation with the Government of Gujarat and 2 members nominated by the Government of Gujarat. GAIMS has its Board of Governors which is of 8 members consisting the Chairman and 5 members nominated by Adani Education and Research Foundation and 2 members of the State of Gujarat, namely, the Principal Secretary, Health and Family Welfare Department and the Principal Secretary, Finance Department.
He has submitted that the hospital has 300 beds and the same is under the control, supervision and administration of the Health Department of the State of Gujarat. At present, the hospital provides only basic medical facilities, namely, maternity care, cataract, accidental cases, etc. He has submitted that in view of the fact that the State Government desired to improve the facilities of the hospital and to set up a super specialty teaching hospital, the Adani Group, with a view to serve the society and people of Kutch, through respondent no.6 thought it fit to accept the management and administration of the hospital and set up a super specialty teaching hospital.
He has also submitted that the super specialty hospital is proposed to be equipped with state-of-the-art medical equipments catering to patients suffering from various diseases for which required facilities are not available. The Adani Group plans to invest an amount of Rs.125 crore in setting up of super specialty teaching hospital and the medical college in Bhuj. This super specialty hospital shall be part of and attached to the existing 300 bed civil hospital, and the identity of the two, shall be maintained separately. In other words, nature and character of medical facilities and services provided by the civil hospital shall continue in the same form and in the same manner as at present, including the same system of free treatment or charges as collected by the State Government today. At the same time, the civil hospital shall benefit with services being provided by respondent no.6 at the charge to be determined by the State Government.
It is also submitted that the State Government passed a resolution dated 27th May 2009 designating the hospital as a teaching hospital and agreed in principle to assign the affairs of the hospital to GAIMS. He has submitted that the petitioner has annexed a resolution dated 19th February 2005 of the State Government assigning the affairs of the hospital to G.K.General Hospital Society on certain terms and conditions. He has submitted that on perusal of the said resolution, it is evident that the State Government has, in fact, prescribed more stringent conditions while agreeing to assign the hospital to GAIMS vide Resolution dated 27th May 2009.
He has also submitted that respondent no.6 has projected to invest Rs.125 crore as capital expenditure for the hospital and medical college and has already completed the construction work involving expenditure of almost half of that amount by now. He has submitted that apart from this, respondent no.6 ha incurred a cumulative deficit of almost Rs.6 crore since its inception for providing medical education to the students of the State. He has submitted that the estimated yearly expenditure for maintenance of the 300 bed civil hospital is around Rs.10 crore and the total annual income of the hospital is around Rs.25 crore. He has submitted that, therefore, from the date of taking over the affairs of the hospital, respondent no.6 will have to bear a huge financial burden every year towards providing medical treatment and service facilities to the people of Kutch District. In addition to the annual operating costs, GAIMS will also have to incur the capital expenditure that may be required for the purchase of new medical apparatus and machines for better and specialized medical services and repair and maintenance of existing instruments.
He has also submitted that the fee for admission into medical college is fixed by the Fee Regulatory Committee (Medical) set by the State Government. The medical college is charging a fee of Rs.3,00,000=00 per student which is lowest amongst the self finance medical colleges in the State. Out of 150 seats, 75% is part of the government quota which means that the Government decides admission on this 75% seats. 10% of the total seats under the management quota and the balance 15% seats are part of the NRI quota. The fees for students admitted under the management quota is the same as those admitted under government quota, which is Rs.3,00,000=00 per student. The fees for the NRI quota are fixed at Rs.8,00,000=00 per student which is lower in comparison to most other self financed medical colleges in Gujarat. He has submitted that in medical colleges, 10% seats are earmarked as management quota. He has submitted that the answering respondent, with a view to uplift the education standard of the Kutch region, proposed to reserve this 10% quota exclusively for students of Kutch. However, the State Government did not approve this proposal. The answering respondent, thereafter, surrendered the quota to the Central Admission Committee for Professional Medical Educational Courses for the academic years 2009-10 and also 2010-11 and did not give admission to any student on management quota seats in the medical college on its own. He has submitted that to preserve the standard of education, the answering respondent did not fill up 6 seats out of NRI quota of 15% in the academic year 2009-10 and also surrendered 6 seats to the Central Admission Committee.
He has submitted that Adani Group has a total investment of almost Rs.27,600 crore in the State of Gujarat, out of which approximately Rs.25,000 crore is in the district of Kutch alone. It has been able to generate employment of thousands of persons directly and lakhs of them indirectly. Its contribution to development of infrastructure be it ports or power projects, has given great fillip to the industrial development of the State of Gujarat in particular and that of the country in general. Under the circumstances, the decision of the State to pass the impugned resolution and give the hospital premises to respondent no.6 cannot be faulted. It is now well-known and a proved experience that the corporate sector has established world-class hospitals in the country and the examples of Apollo hospital, Max hospital and Fortis hospital are classic examples. In the present case, as the resolution shows the fundamental philosophy of serving the people of Kutch for which the civil hospital was established is not to be changed. Far from it, that purpose is being strengthened with the commitment to enhance the facilities while continuing to provide free medical services or charge at government rates in respect of patients for initial 300 beds. The income from the college is required to be expended for the hospital and the hospital is to be managed from its own resources by respondent no.6. Violations of conditions specified would naturally entail consequences under General Law. The resolution in question is eminently to sub serve the public interest and deserves to be upheld.
He has relied upon the following case-laws :-
Sachidanand Pandey v/s. State of West Bengal ((1987)2 SCC 295;
M/s.Kasturi Lal Laksmi Reddy v/s. State of Jammu and Kashmir [(1980)4 SCC 1;
R.D.Shetty v/s. International Airport Authority [(1979)3 SCC 489; and Netai Bagh v/s. State of West Bengal [(2000)8 SCC 262.
Mr.Nanavati has invited our attention to one additional affidavit filed on behalf of respondent no.6, wherein the stand taken is as under :-
"I am filing the present affidavit, without prejudice to rights and contentions of the parties and without delving into the merits of the case, pursuant to what transpired in the course of the hearing of the above writ petition before this Hon'ble Court on 26.7.2011 and the order passed by this Hon'ble Court on that date.
I state and submit that in addition to the conditions, measures and steps which are required to be taken by respondent no.6 under the Resolution dated 27.5.2009 upon taking over of the G.K.General Hospital, Bhuj and while maintaining its status as a civil hospital/general hospital, the following further measures and steps will be taken by and on behalf of respondent no.6 as part of its social and managerial commitments to sub serve the public interest;
I. The existing capacity of the Civil Hospital at 300 beds will not only be continued as such, but additional 450 beds would be added in due course of time at an approximate cost of Rs.30 crore to benefit the people of the District of Kutch.
II.
The existing status of the Civil Hospital in respect of existing 300 beds to provide medical services to patients will continue to be provided the same in the best possible manner and at high professional standards.
III.
People entitled to free medical services in the Civil Hospital will be added the following groups of people :
(a) Employees of the State and Central Government (working as Class-IV, III & II employees in that order).
(b) Employees working in Courts.
(c) Retired Personnel of the Armed Forces including BSF.
IV.
The persons referred in sub-paragraphs II and III above will also be provided additional medical services free of cost as may be recommended by the concerned Doctors and certified by the CDMO in the form of free diagnostic, blood and physical investigations, operations/surgeries and medicines to indoor patients.
V. Respondent no.6, upon expansion of the facilities in the Civil Hospital, will make available, inter alia, medical facilities for diagnosis and treatment in the fields of Cardiac, Nephrology, Oncology, Neurology, Orthopedic, Biliary Sciences (Liver) and Internal Medicine over a period of time to make the Civil Hospital a multi-specialty health care.
VI.
Respondent no.6, as part of its social commitment, setup a medical college with an intake capacity of 150 students per annum since the academic year 2009-10, and the total outlay envisaged for creating an institute of excellence and improvement of the Civil Hospital is approximately Rs.125 crore, out of which approximately Rs.62 crore have already been spent including about Rs.6 crore towards upgrading the existing Civil Hospital. Once the Civil Hospital comes under the management of respondent no.6, the hospital and the medical college will complement and supplement each other to better the health services in the hospital on account of availability of a large pool of students, residents and interns, while the medical college will benefit with the availability of increased number of patients to provide sufficient exposure and opportunity to the students to learn and sharpen their skills as future doctors.
VII.
Respondent no.6 will maintain the Civil Hospital with high standards by engaging services of qualified doctors, nurses and support staff. It will also maintain standards of cleanliness and hygiene in day-to-day running of the Hospital for all 750 beds and will continue to not only maintain the existing infrastructure in good condition but will enhance the same by appropriate maintenance, repairs, additions and alterations to provide a fine hospital.
VIII.
As part of its commitment, respondent no.6 further agrees to surrender hereby 10% seats reserved for management quota (15 seats) to the Admission Committee for Professional Medical Education Courses in Gujarat in favour of meritorious students domiciled in Kutch District from the list of candidates who have passed the Common Entrance Examination for MBBS admissions in the State of Gujarat. Respondent no.6 has already agreed to abide by the process of admission and scale of fees that may be fixed by the State Government in the State of Gujarat for 75% Government quota students and has also undertaken that it will plough back surplus, if any, from the medical college for financing the deficit of the Civil Hospital and development of the hospital infrastructure.
IX.
Respondent no.6 has undertaken free multi diagnostic medical health check up camps in diverse villages in Kutch District, during 2010-2011 and will continue to do so in future to provide free medical check up followed by appropriate treatment in Civil Hospital to all deserving persons belonging to abovementioned groups."
Mr.Nanavati has also invited our attention to the affidavit dated 5th August 2011 on behalf of respondent no.6, wherein it has been stated as under :
"The respondent no.6 intend to give more benefit to the people of Gujarat as hereunder :
The status of G.K.General Hospital, Bhuj will continue as a Civil Hospital and in respect of the existing 300 beds and respondent no.6 will continue to provide the medical services as used to be given by the State Government to the citizens of the State and as per the conditions stipulated by the State of Gujarat in Resolution dated 27.5.2009.
Apart from the 300 beds, respondent no.6 will provide additional 450 beds in due course of time. The respondent no.6 will incur a cost of Rs.30 crore towards improving and expanding the infrastructure of the Hospital.
Apart from the benefits to which citizens of the State were entitled for treatment in the Civil Hospital against 300 beds, following additional benefits will be provided for 300 beds to certain categories of patients mentioned below :-
(1)No separate charge will be taken for hospitalization in these 300 beds, (2) No separate charge will be taken for any treatment including operation, investigation and medicines and free treatment, operation, investigation and medicines shall be supplied to the indoor patients.
The aforesaid benefits will be provided to the following additional categories of patients, viz.
(a) BPL cardholders,
(b) Other poor patients not holding BPL cards, who have been certified by CDMO as deserving free medical services,
(c) Gujarat State Government employees posted within the State of Gujarat,
(d) Employees of High Court, District Courts and other Courts of the State of Gujarat,
(e) Retired Armed Forces including BSF residing within the State of Gujarat.
Respondent no.6 will permanently release 10% management quota of the medical college, i.e. 15 seats, to the Admission Committee for Professional Medical Educational Courses of Gujarat for admission of local students of Kutch District, if they come out successful in the entrance test irrespective of their position in the general merit list.
In view of the aforesaid facts and circumstances, respondent no.6 humbly prays that this Hon'ble Court be pleased to appropriately modify the interim relief granted vide order dated 8.7.2011 and direct the State Government to handover administration, control and management of the Hospital to respondent no.6 in the interest of the people of the Kutch District not later than four weeks time from the date of order of this Hon'ble Court and further be pleased to dispose of the petition accordingly."
VII.
Analysis :
It is manifest from the materials on record that the State Government is of the view that over and above industrialization, in the social sector also it is possible to create one nucleus structure by adopting the Public Private Partnership model in the health sector and for this purpose the infrastructure of a hospital can become one important center point.
The Government felt that if a super specialty teaching hospital is developed with Public Private Partnership, it can create excellent facility for medical tourism. By conversion of the hospital into a teaching hospital, the doctors would be available in adequate numbers and excellent quality of medical services would become available at reasonable charges in the region of Kutch, more particularly, for the poor and the needy patients.
Keeping this object in mind, the Government took up into consideration the matter of Public Private Partnership for managing the operations of the Sheth G.K.General Hospital, Bhuj and establishing a new medical college at Bhuj. It is also clear from the records that the Government received proposals from two very well reputed institutions, namely, Narayan Hrudayalaya Institute of Cardiac Sciences, Bangalore and Manipal University, Manglore. However, while considering their proposals the Government felt that the terms and conditions were unreasonable and such terms and conditions could never be accepted. The terms and conditions which were put forward by Narayan Hrudayalaya Institute of Cardiac Sciences, Bangalore, Manipal University, Mangalore and Adani Education and Research Foundation, Ahmedabad have been exhaustively considered by us in paragraph 7 of our judgment. The Government, thereafter, took into consideration the proposal of the Gujarat Adani Institute of Medical Sciences who expressed their interest for undertaking the management of Sheth G.K.General Hospital, Bhuj and for the establishment of a new medical college on Public Private Partnership model. It is in this background that a Memorandum of Understanding was entered into for this purpose.
Recently, there has been shift towards encouraging private bodies in the Government works and promoting the concept of Public Private Partnership. In the words of the Supreme Court, if India has to develop and grow fast and become strong to take its rightful place in the comity of nations, then the imperialist's formula of "philanthropy plus five per cent" is the accepted norm. Public Private Partnership is the latest mantra. It would be appropriate to quote the following observations of the Supreme Court made in the case of Mahanadi Coalfields Limited and another v/s. Mathias Oram and others, reported in (2010)11 SCC 269. Relevant paragraphs 5 and 6 read as under :-
"5.
Development is reckoned in terms of investments in urban infrastructure, roads and highways, communication, technology, extraction and commercial exploitation of minerals, generation of power, production of steel and other essential metals and alloys. Creation of wealth is of utmost importance. Redemption lies in GDP (gross domestic product).
6. India does not lack material resources required for development. There are vast treasures of minerals lying buried deep inside its earth. But excavation of minerals from the bosom of the earth and putting them to good industrial and commercial use require lots of initial investment and highly advanced technology. Those too are now available as blessings of globalisation. The imperialist's formula of "philanthropy plus five per cent" is the accepted norm. Public-private partnership is the latest mantra. For some reasonable profits, companies and corporations, both Indian and multinational are willing and ready not only to do the mining for us but also to undertake the development of the region by providing schools, hospitals, and many similar amenities and facilities to the local population. Even the public sector undertakings are not lagging far behind in the race."
One can find some reflection of the policy of Public Private Partnership from the provisions of a State enactment i.e. The Gujarat Infrastructure Development Act, 1999. The said Act was amended by Gujarat 18 of 2006 dated 31st March 2006. It was enacted with the object to provide for a framework for participation of persons other than the State Government and Government agencies in financing, construction, maintenance and operation of infrastructure projects and for that purpose, to establish a Board and to provide for the matters connected therewith. We shall also look into some of the provisions of the Act relevant so far as the subject matter of this petition is concerned:
"Section 2(c) defines the term "developer" which means a person with whom concession agreement is entered into by the State Government, a Government agency or a specified Government agency.
Section 2(e) defines the term "Government agency" which means a Corporation or a body owned or controlled by the State Government or an authority established by or under any law and includes a local authority.
Section 2(f) defines the term "infrastructure" which means facilities and services provided by a project.
Section 2(j) defines the term "project" which means a project specified in Schedule I."
Section 10A provides for selection by direct negotiation. Section 10A reads as under :
"10A.
Selection by direct negotiation. - (1) Notwithstanding anything contained in sections 9 and 10, a person other than the State Government, Government agency or specified Government agency, may submit a proposal and proposed concession agreement for direct negotiation to the State Government, Government agency or the specified Government agency for any of the project specified in Schedule III.(2)
If the State Government, Government agency, or, as the case may be, the specified Government agency is satisfied that the project is of a nature specified in Schedule III, it may -
(a) consider the proposal from all aspects (including technical and financial) and if necessary modify the same in consultation with the person who has submitted the proposal and the proposed concession agreement, and
(b) submit the proposal and the proposed concession agreement to the Board, if the cost of the project exceeds the limit provided by the regulations.(3)
On acceptance of the recommendation of the Board made under sub-section (2) of section 5, the State Government, Government agency or, as the case may be, the specified Government agency may enter into a concession agreement with a person who has submitted the proposal under sub-section (1)."
"SCHEDULE III (SEE SUB-SECTION(1) OF SECTION 10A) PROJECTS OF SPECIAL NATURE A project which is innovative or involves proprietary technology or franchise which is exclusively available with the person globally.
A project wherein competitive public bidding as provided in section 9 has failed to select a developer.
A project to provide social services to the people including community services and public utilities.
An infrastructure project which is an essential link for another bigger infrastructure project owned or operated by the same person."
We have also gone through the terms and conditions as laid down by the State Government in its resolution dated 27th May 2009. We are convinced by the fact that the conditions which have been imposed provide adequate safeguard to protect the interest of the Government as well as the people at large who are to take benefits of the medical services. Apart from giving free services to poor patients, few salient features of the Understanding which, according to us, are important, are as under :-
(a) the hospital management committee will be appointed under the Chairmanship of the Government nominee.
(b) the Gujarat Adani Institute of Medical Sciences will provide for all capital and revenue expenditure for the medical college and all income generated out of the medical college will be spent only on the development of the hospital.
(c) the name of the hospital shall remain the same i.e. Sheth G.K.General Hospital and shall be recognized as civil hospital and no change will be made in future so far as the name is concerned.
We have also noticed that the assets have been transferred for specific objects and if there is any change in the use of land, the land and the assets thereon will automatically revert to the Government without any compensation and the transfer of land by way of lease would be rendered void-ab-initio.
In short, while the title to the entire property remains with the State Government, the right of enjoyment has been given to the Society and, adequate care has been taken by way of imposing a condition that in case of change in use of the leased property by respondent no.6, the land and the assets thereon will be taken back by the Government without any compensation.
It is true that the Government took decision to handover the possession of the land in favour of respondent no.6 by entering into a lease deed of 99 years, but at the same time, the nominee of the State Government will head a Managing Committee for managing the affairs of the civil hospital.
We are convinced by the fact that there is adequate and sufficient voice of the Government in so far as the administration and supervision of the hospital is concerned. This is evident by the fact that the Committee of eleven Members constitutes three Members nominated by the Chairman in consultation with the Government of Gujarat and two Members nominated by the Government of Gujarat. At the same time, Gujarat Adani Institute of Medical Sciences has its Board of Governors which includes two Members of the State of Gujarat, namely, the Principal Secretary, Health and Family Welfare Department and the Principal Secretary, Finance Department. Beside this, we have also noticed and we have discussed this in the earlier part of our judgment that the Government had to enter into a lease deed of 99 years as one of the provisions of the Medical Council Act and the Regulations made thereunder. The concerned applicant i.e. GAIMS must possess 25 acres of land having a lease of 99 years.
We are of the view that taking into consideration the object with which the State Government has entered into an agreement with respondent no.6 on the basis of Public Private Partnership model, it cannot be said that the State property is being alienated for the augmentation of the income of the State or for the benefit of any individual, but for a laudable object of providing better health facilities and services to the people of the region of Kutch, more particularly, people hailing from a very poor and lower strata of the society. This comprehension or act done cannot be termed to be distribution of the State largesse to any chosen person or for enrichment of any one individual. There is no element of augmentation of the revenue enjoining an obligation to the State to secure the best market price in a market economy. Essentially, it is a policy decision of the State and the State would be well-within its right to enter into such an agreement to achieve the defined constitutionally recognized public purpose or goal setup by Part IV of the Constitution of India which can be termed as a 'public policy'.
The decision of the State Government cannot be said to be, in any manner, illegal or the project can be said to be illegal or suffers from any malice or is not desirable or is one favouring a particular company. We are of the view that it would not become unreasonable or unconstitutional merely because it is unconventional in practice. As we have said earlier, time has come for the Governments to take such steps in the larger interest of the development of this nation.
We are of the view that reasonableness of the policy has to be determined by well accepted constitutional norms as well as fair play, whether the policy framed was made on extraneous considerations or is made without taking into consideration the relevant consideration, whether it is arbitrary or suffers from the vice of malice. All the above referred considerations are to be tested on the principle that the actions of the Government are presumed to be reasonable unless proved otherwise. The Court, in its judicial process, cannot enter into examining the Government actions that assume doubt and lacking of bonafides. Merely because the petitioner herein is of the opinion that it was not ethical on the part of the State Government to enter into such an agreement with respondent no.6, a big industrial house, would not confer on the Court the jurisdiction to set at naught the Government action. Perception would differ. In one's perception an act may not be ethical while in the perception of the other, ethical. The correct test laid down to judge the administrative action is whether appropriate consideration was borne in mind and irrelevancy is excluded. Nothing should appear to have been done under bias, jobbery or nepotism.
We are of the firm view and it is well established, rather axiomatic, that the Court does not act as appellate authority and cannot re-appraise the terms of the Memorandum of Understanding especially when the act of the State is neither vitiated nor tainted with any collateral consideration.
We are of the considered view that the policy of privatization, economic development, use of resources of the country, goals to be attained, measures to safeguard to prevent abuse of economic power, mechanism of accountability, the public interest are within the domain of the State role, though the role of the State is hatched by providing do's and dont's by the Constitution, rules and regulations, fair play, etc. It was observed in Delhi Science Forum v/s. Union of India (AIR 1996 SC 1356) that:
"...before the decision of the authority questioning award of contracts vested in the statutory authority can be questioned on the ground; 1) decision has been taken in bad faith; 2) decision is based on irrational or irrelevant consideration; and 3) decision has been taken without following the prescribed procedure which is imperative in nature. The onus is not discharged only by raising a doubt in the mind of the Court, but by satisfying the Court that the authority or the body which had been vested with the power to take decision has adopted a procedure which does not satisfy the test of Article 14."
We are satisfied that no such allegations, which satisfy us, much less raise a doubt in our mind, that the decision to handover the management of the civil hospital in favour of respondent no.6 subject to certain terms and conditions on the basis of Public Private Partnership model suffers from any vices or knots provided by the Constitution while dealing with State property. The venture is not a commercial venture, but a public interest venture. It cannot be tested on the anvils of the parameters of the commercial ventures.
We are fully supported by the observations made in B.Krishna Bhat v. Union of India, reported in (1990) 3 SCC 65, Shri Sitaram Sugar Co. Ltd. v. Union of India, reported in (1990) 3 SCC 223, State of Punjab v. Ram Labhaya Bagga reported in (1998) 4 SCC 117, Krishnan Kakkanath v. Govt. of Kerala, reported in (1997) 9 SCC 495 and Sterling Computers Ltd. v. M and N Publication Ltd., reported in (1993) 1 SCC
445. It further emerges from the law laid down by the said judgments : 1) that the formulation and implementation of any economic policy is the responsibility of the executive. The merits of such policy are not susceptible to judicial review except on the ground of constitutional infirmities; 2) Courts are not placed in a position to determine as to whether an alternative policy formulation would have been better. The formulation and implementation of policy regarding utilization of natural resources may depend upon variety of factors. Essentially it is a politico-economic judgment; 3) a large latitude has to be allowed to decide as to whether it is a reasonable decision and economic soundness of the development plan. The plan cannot be a subject-matter of debate in a judicial review proceeding unless it is contrary to the Constitution; 4) in deciding the policies, the Executive is entitled to take legitimate and political and economic considerations into account, for the promotion of regional stability, good Government, commercial interest. The Executive is fully entitled while making the decisions keeping in view the principle that the machinery of the Government would not work if it was not allowed a little play in its joints.
We are of the considered view, after going through the materials on record and hearing the counsel for the parties and the arguments advanced, that the policy decision was arrived at after long drawn deliberations at various highest levels of different departments of the State Government. This is evident by the fact that the Government thought fit to pass a resolution dated 20th September 2008 constituting a high level committee for Public Private Partnership projects in health sector. The resolution speaks for itself.
We shall now look into the case-law which has been relied upon by learned counsel for the petitioner to make good his case that the decision of the State Government is not in accordance with law. Learned counsel for the petitioner relied upon the decision of the Supreme Court in Akhil Bhartiya Upbhokta Congress's case (supra), where the Supreme Court in paragraph 66 has observed as under :-
"We may add that there cannot be any policy, much less, a rational policy of allotting land on the basis of applications made by individuals, bodies, organisations or institutions dehors an invitation or advertisement by the State or its agency/ instrumentality. By entertaining applications made by individuals, orgainsations or institutions for allotment of land or for grant of any other type of largesse the State cannot exclude other eligible persons from lodging competing claim. Any allotment of land or grant of other form of largesse by the State or its agencies/instrumentalities by treating the exercise as a private venture is liable to be treated as arbitrary, discriminatory and an act of favouritism and/or nepotism violating the soul of the equality clause embodied in Article 14 of the Constitution."
However, at the same time in paragraph 67, Supreme Court in so many words has said that it cannot be said that the State can never allot land to the institutions/organizations engaged in philanthropic activities or are rendering services to the society except by way of auction. Paragraph 67 of the said judgment reads as under :-
"This, however, does not mean that the State can never allot land to the institutions/organisations engaged in educational, cultural, social or philanthropic activities or are rendering service to the society except by way of auction. Nevertheless, it is necessary to observe that once a piece of land is earmarked or identified for allotment to institutions/organisations engaged in any such activity, the actual exercise of allotment must be done in a manner consistent with the doctrine of equality. The competent authority should, as a matter of course, issue an advertisement incorporating therein the conditions of eligibility so as to enable all similarly situated eligible persons, institutions/organisations to participate in the process of allotment, whether by way of auction or otherwise. In a given case the Government may allot land at a fixed price but in that case also allotment must be preceded by a wholesome exercise consistent with Article 14 of the Constitution."
We shall now look into the case-law relied upon by learned counsel appearing for Union of India. He has relied on the decision of the Supreme Court in the case of M/s.Kasturi Lal Lakshmi Reddy (supra). In paragraph 11 of the said judgment, the Supreme Court held as under :-
"So far as the first limitation is concerned, it flows directly from the thesis that, unlike a private individual, the State cannot act as it pleases in the matter of giving largesse. Though ordinarily a private individual would be guided by economic considerations of self-gain in any action taken by him, it is always open to him under the law to act contrary to his self-interest or to oblige another in entering into a contract or dealing with his property. But the Government is not free to act as it likes in granting largess such as awarding a contract or selling or leasing out its property. Whatever be its activity, the Government is still the Government and is, subject to restraints inherent in its position in a democratic society. The constitutional power conferred on the Government cannot be exercised by it arbitrarily or capriciously or in an unprincipled manner, it has to be exercised for the public good. Every activity of the Government has a public element in it and it must, therefore, be informed with reason and guided by public interest. Every action taken by the Government must be in public interest; the Government cannot act arbitrarily and without reason and if it does, its action would be liable to be invalidated. If the Government awards a contract or leases out or otherwise deals with its property or grants any other largesse, it would be liable to be tested for its validity on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid."
However, observations made by the Supreme Court in paragraph 14 are important, which are as follows :-
"Where any governmental action fails to satisfy the test of reasonableness and public interest discussed above and is found to be wanting in the quality of reasonableness or lacking in the element of public interest, it would be liable to be struck down as invalid. It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public interest. The Government, therefore, cannot for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so. Such considerations may be that some Directive Principle is sought to be advanced or implemented or that the contract or the property is given not with a view to earning revenue but for the purpose of carrying out a welfare scheme for the benefit of a particular group or section of people deserving it or that the person who has offered a higher consideration is not otherwise fit to be given the contract or the property. We have referred to these considerations only illustratively, for there may be an infinite variety of considerations which may have to be taken into account by the Government in formulating its policies and it is on a total evaluation of various considerations which have weighed with the Government in taking a particular action, that the Court would have to decide whether the action of the Govt. is reasonable and in public interest. But one basic principle which must guide the Court in arriving at its determination on this question is that there is always a presumption that the governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest. This burden is a heavy one and it has to be discharged to the satisfaction of the Court by proper and adequate material. The Court cannot lightly assume that the action taken by the Government is unreasonable or without public interest because, as we said above, there are a large number of policy considerations which must necessarily weigh with the Government in taking action and therefore the Court would not strike down governmental action as invalid on this ground, unless it is clearly satisfied that the action is unreasonable or not in public interest. But where it is so satisfied, it would be the plainest duty of the Court under the Constitution to invalidate the governmental action. This is one of the most important functions of the Court and also one of the most essential for preservation of the rule of law. It is imperative in a democracy governed by the rule of law that governmental action must be kept within the limits of the law and if there is any transgression, the Court must be ready to condemn it. It is a matter of historical experience that there is a tendency in every government to assume more and more powers and since it is not an uncommon phenomenon in some countries that the legislative check is getting diluted, it is left to the Court as the only other reviewing authority under the Constitution to be increasingly vigilant to ensure observance with the rule of law and in this task, the court must not flinch or falter. It may be pointed out that this ground of invalidity, namely, that the governmental action is unreasonable or lacking in the quality of public interest, is different from that of mala fides though it may, in a given case, furnish evidence of mala fides."
We shall now consider the case-law relied upon by learned counsel for respondent no.6. Learned counsel has relied on the judgment of the Supreme Court in Villianur Iyarkkai Padukappu Maiyam v/s. Union of India and others, reported in (2009) 7 SCC 561. The following paragraphs of the judgment are important :-
"Generally, when any State land is intended to be transferred or the State largesse decided to be conferred, resort should be had to public auction or transfer by way of inviting tenders from the people. However, what is important to notice is that the old Pondicherry Port is very much in existence. This is not a case of establishment of new port at Pondicherry but this is a case of developing an existing port to meet rapid changes in transport technology and to improve the existing port facilities. The development of an existing port on build, operate and transfer basis can never be equated with intended sale of government land or transfer of State largesse.
This is not a case where a State asset is sought to be sold or the State is out to purchase goods. Such cases stand on a different footing from a major issue of economic development such as development of a port. Respondent 11 was called upon to develop the Pondicherry Port on BOT basis. Thus after development of the Port, the same will have to be retransferred to the Government of Pondicherry.
In the matter of policy decision and economic tests the scope of judicial review is very limited. Unless the decision is shown to be contrary to any statutory provision or the Constitution, the Court would not interfere with an economic decision taken by the State. The Court cannot examine the relative merits of different economic policies and cannot strike down the same merely on ground that another policy would have been fairer and better.
In a democracy, it is the prerogative of each elected Government to follow its own policy. Often a change in Government may result in the shift in focus or change in economic policies. Any such change may result in adversely affecting some vested interest. Unless any illegality is committed in the execution of the policy or the same is contrary to law or mala fide, a decision bringing about change cannot per se be interfered with by the Court.
It is neither within the domain of the courts nor the scope of judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are the courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical. Wisdom and advisability of economic policy are ordinarily not amenable to judicial review. In matters relating to economic issues the Government has, while taking a decision, right to 'trial and error' as long as both trial and error are bona fide and within the limits of the authority. For testing the correctness of a policy, the appropriate forum is Parliament and not the courts.
Normally, there is always a presumption that the governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest. This burden is a heavy one and it has to be discharged to the satisfaction of the court by proper and adequate material. The court cannot lightly assume that the action taken by the Government is unreasonable or against public interest because there are large number of considerations, which necessarily weigh with the Government in taking an action.
In a case like this where the State is allocating resources such as water, power, raw materials, etc. for the purpose of encouraging development of the port, this Court does not think that the State is bound to advertise and tell the people that it wants development of the port in a particular manner and invite those interested to come up with proposals for the purpose. The State may choose to do so if it thinks fit and in a given situation it may turn out to be advantageous for the State to do so, but if any private party comes before the State and offers to develop the port, the State would not be committing breach of any constitutional obligation if it negotiates with such a party and agrees to provide resources and other facilities for the purpose of development of the port.
The State is not obliged to tell the respondent "please wait I will first advertise, see whether any other offers are forthcoming and then after considering all offers, decide whether I should get the Port developed through you". It would be most unrealistic to insist on such a procedure, particularly, in an area like Pondicherry, which on account of historical, political and other reasons, is not yet industrially developed and where entrepreneurs have to be offered attractive terms in order to persuade them to set up industries. The State must be free in such a case to negotiate with a private entrepreneur with a view to inducing him to develop the Port and if the State enters into a contract with such an entrepreneur for providing resources and other facilities for developing the Port, the contract cannot be assailed as invalid because the State has acted bona fide, reasonably and in public interest.
It is true that one of the methods of securing the public interest, when it is considered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. But as noted earlier, this is not a case of sale of property by the State. Though public auction or inviting of tenders is the ordinary rule in case where the State Government proposes to dispose of a property, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule, the reasons indicated in this case for the departure are shown to be rational and are not suggestive of discrimination."
In the above conspectus of the entire matter, we are convinced that no ground has been made out by the petitioner to set at naught the Memorandum of Understanding arrived at between the State Government and the respondent no.6 - Gujarat Adani Institute of Medical Sciences.
We are also convinced by the fact that the State Government has taken all possible steps to safeguard the general public interest and by this venture of the State Government a citizen will not be put to any loss or will not be deprived of any basic medical facilities which otherwise he would have got from the civil hospital which was earlier being managed by the Society but, on the contrary, with modernisation of the hospital and with introduction of super-specialty teaching hospital equipped with the state-of-the-art medical equipments the quality of medical services will be much - much better.
In this view of the matter, the petition fails and is hereby rejected with no order as to costs. Interim relief granted earlier stands vacated.
Before parting, we clarify that it will be open for the State Government to proceed further in the matter in terms of the Memorandum of Understanding dated 27th May 2009 but, at the time of entering into the agreement with respondent no.6 - Gujarat Adani Institute of Medical Sciences, the Government shall ensure that over and above the conditions which have been stipulated in the Resolution dated 27th May 2009, the conditions as enumerated in paragraphs 15 and 16 of this judgment shall also be added and shall be a part of the agreement. To be precise, the additional facilities which respondent no.6 has agreed to provide as per their affidavit-in-reply (reference of which has been given by us in paragraphs 15 and 16 of this judgment) shall also be a part of the agreement.
(Bhaskar Bhattacharya, Acting C.J.) (J.B.Pardiwala, J.) After this order is passed, learned advocates appearing on behalf of the petitioner and the Union of India pray for stay of operation of our order for a period of six weeks.
In view of what has been stated above, we find no reason to stay our order. The prayer is, therefore, rejected.
(Bhaskar Bhattacharya, Acting C.J.) (J.B.Pardiwala, J.) /moin