A hospital that enters into an agreement with a government entity to provide free medical treatment to a specified percentage of patients is obligated to provide comprehensive free treatment, including medicines and consumables, in accordance with the purpose of the agreement.

1. The present public interest litigation has been filed by All India Lawyers Union seeking directions for ensuring free medical treatment in terms of the lease agreement dated 16th March, 1994 entered into between the Govt. of National Capital Territory of Delhi (hereinafter referred to as the GNCTD) and respondent No.2, i.e. Indraprastha Medical Corporation Ltd./ Indraprastha Apollo Hospital (hereinafter referred to as the IMCL) to establish a multi-disciplinary super specialty hospital. The petition is, inter alia, directed against the inaction of the GNCTD and IMCL to provide free treatment and medicines to the poor and needy citizens at the respondent No.2 hospital. It is contended inter alia that such inaction of both the respondents is adversely affecting the mandates of Articles 21, 39(e), 41, and 47 of Constitution of India. In course of proceedings, the Union of India and the Delhi Development Authority were also impleaded as party respondents. Before appreciating the issues under consideration in the present petition, a brief historical background is essential.

THE BACKGROUND FACTS

2. In 1986, the Delhi Administration (now the Government of NCT of Delhi), in order to utilize the then incomplete Players Building near IP Stadium, lying vacant with its Medical Department, initiated the decision to open a multi-disciplinary super specialty hospital on „no profit no loss basis, after inviting offers from private institutions. A notice was issued in this regard which has been placed on record and accordingly, building along with the land was to be made available free of cost provided the hospital is, on the whole, run on a „no profit no loss basis providing free medical and other facilities to at least 1/3rd of its indoor patients and 40% of its outdoor patients without any discrimination. The hospital was also required to participate in National Health programmes and Delhi Administration was to have due representation in the Management Committee of the upcoming hospital.

3. Pursuant to this notice, in all 25 offers were received and a High Powered Committee, under the Chairmanship of the Lt. Governor and other senior officers of the Central Government and the GNCTD as its members, short-listed four names suitable for the proposed hospital. The Laxmipat Singhania Medical Foundation in association and collaboration with Apollo Hospital Group was one of the offerers. The foundation was agreeable to run the hospital on „no profit no loss basis and to provide free medical and other facilities to 1/3 of indoor patients and 40% of outdoor patients in terms of notice issued by Delhi Administration.

4. Dr. Pratap C. Reddy, Chairman, Apollo Hospital also submitted a separate proposal, where he had given his own terms and conditions stating that the hospital, when completed, should treat nearly 10000 in-patients and over 30000 out-patients every year. As a commitment to serve various cross-sections of people, the hospital would offer: (a) 10% of the facilities, free of cost, (b) 10% of the facilities where patients pay only for the medicines and disposables and (c) 10% of the facilities at subsidized rates. Subsequently, after due deliberations, the aforesaid high power committee considered all the short listed cases and finally it was decided that Apollo Hospital Enterprises Ltd. will be the principal partner with the GNCTD on the same terms as offered by the Singhania Foundation in collaboration with Apollo Hospital. Thereafter, the President of India through Lt. Governor of Delhi entered into a Joint Venture Agreement dated 11th March, 1988 with Apollo Hospital Enterprises Ltd., specifically mentioning that the Administrator has decided to establish a project regarding multi-disciplinary specialty hospital in the building next to Indira Gandhi Indoor Stadium. The Administrator and Apollo Hospital also agreed to jointly promote and get registered public limited company under the name of IMCL as envisaged in the agr