The court submissions followed a petition by a registered start-up challenging the bidding conditions imposed by a super-specialty hospital under the Delhi government for the purchase of stents, grafts and valves for the cardiology department.
The petitioner claimed that while all the other hospitals issued tenders which granted flexibilities to start-ups and MSMEs with regard to turnover, past performance and guarantee of tenders, no flexibilities would was granted in the present case and the same is against starting the Center-up policy while also violating Articles 14 and 19(1)(g) of the Constitution of India.
Addressing the issue raised in the petition, a bench headed by Chief Justice Satish Chandra Sharma said that although start-ups are promoted by the Center as well as the Delhi government through their respective policies, the The Centre’s circular executive instruction did not make it mandatory for any establishment to relax the condition relating to turnover and prior experience when dealing with them.
“The central government, in order to promote start-ups and MSMEs (micro, small and medium-sized enterprises), entities launched the Start-up India initiative in 2016, and various executive instructions have been issued from time to time granting flexibilities to Start-Entities and MSMEs regarding past performance, security of bids and turnover to ensure new talent is promoted in the new competition,” said the bench also including the Judge Subramonium Prasad.
“The executive instruction does not oblige any establishment to relax the condition relating to turnover and previous experience/EMD because the word “may” was used in the orientation circular of 10.03.2016. It is It is true that the Government of India as well as the GNCTD under its Delhi NCT, 2019 policy encourages startups.However, in some areas, past experience and other qualifications cannot be relaxed, in particularly in the area of health care,” the court said.
The court noted that the hospital concerned was facing an abnormally high death rate of heart patients and that it was in this setback that the criteria for start-ups and MSMEs were not relaxed and that the supply quality products and quality implants from experienced companies people were wanted.
“Patient safety is of paramount importance and therefore the respondent hospital has rightly granted no alleviation to start-ups and MSMEs in the particular facts and circumstances of the case. brief is, accordingly, dismissed,” the court said.
The court observed that the lack of easing was “not an unreasonable restriction having regard to the particular nature of the work” and “the claimant cannot compare previous offers to other hospitals for the simple reason that there has not been such an exorbitant increase in the death rate in any other hospital”.
Court said Delhi government policy recognizes start-ups that work on innovation, development or improvement of products, processes or services or if it is a business model scalable company with high potential for job creation or wealth creation and since the petitioner was a trader with no innovation of any kind involved in his “so-called start-up”, there was no reason to interfere with the terms of the tender.
He further stated that the development of the terms of the tender is at the sole discretion of the authority that issued the tender, and unless and until the terms of the invitation to tender is arbitrary, or is contrary to legal provisions, or has been designed to favor an individual, the question of interference by the court does not arise.