1 IN THE HIGH COURT OF BOMBAY AT GOA Misc. Civil Application No. 623/2011 in P. I. L. Writ Petition No. 359/2007 1. Mr. Prakash B. Sardessai, Major, married, businessman, r/o Madant, Cortalim-Goa. 2. Vishvesh P. Sardessai Residing at Madant, Cortalim-Goa ... PETITIONERS/ APPLICANTS V e r s u s 1. The Secretary, Ministry of Health, Government of Goa, Secretariat, Porvorim-Goa. 2. The Director, Directorate of Health Services, Government of Goa, Campal, Panaji, Goa, and ors. … RESPONDENTS/ NON APPLICANTS -------------------------------------------------------------------------------- Mr. S. D. Lotlikar, Amicus Curiae. Ms. N. Kholkar, A. G. A. for non applicants. --------------------------------------------------------------------------------- WITH WRIT PETITION NO. 394/2011 Shri Francisco D'Souza, 56 years old, married, advocate and sitting MLA of Mapusa Goa, residing at 93/9, Kamat Gardens, Mapusa, Bardez, Goa. ... PETITIONER Versus 2 1. The State of Goa, through its Chief Secretary with the Office at Secretariat, Porvorim, Bardez, Goa. 2. The Department of Public Health Government of Goa, through the Secretary (Health) with Office at Secretariat, Porvorim, Bardez, Goa. ... RESPONDENTS Radiant Lifecare P. Ltd. having its office at C-4/5, Lower Ground floor, Safdurjung Development Ara, Delhi ... INTERVENOR --------------------------------------------------------------------------------- Mr. V. P. Thali, Advocate for the petitioner with Mr. S. D. Lotlikar, Amicus Curiae. Mr. S. S. Kantak, Advocate General and Ms. Neha Kholkar, A. G. A. for respondent nos. 1 and 2. Mr. S. G. Aney, Senior Advocate with Mr. M. S. Sonak and P. S. Rao, Advocates for Intervenor. --------------------------------------------------------------------------------- CORAM: S. A. BOBDE & F.M. REIS, JJ. DATE OF RESERVING THE JUDGMENT : 14 th July, 2011 DATE OF PRONOUNCING THE JUDGMENT:12 th August, 2011 ORAL JUDGMENT (per S. A. Bobde, J) 1. Heard learned counsel for the parties. 2. Misc. Civil Application No. 623/2011 and Writ Petition No. 394/2011 have been taken up together since the prayers are common. Misc. Civil Application No. 623/2011 has been preferred in Public Interest Litigation Writ Petition No. 3 359/2007 which is a Public Interest Litigation praying, inter alia, for directions to the State for improving the standards of health care in the State of Goa and in particular for directions to the State for providing adequate number of Doctors, trained Nurses and other staff and to ensure proper maintenance of hospitals including Asilo Hospital at Mapusa. In the said Public Interest Litigation the present application has been moved by the petitioners praying for an interim order restraining the State of Goa from handing over the District Hospital at Mapusa to private operator with a further direction to the State to commission the District Hospital and run it as a State District Hospital. 3. Writ Petition No. 394/2011 is filed in public interest by a Member of Legislative Assembly, who was formerly a Minister. The petitioner has submitted that Asilo Hospital located in Mapusa is in very bad condition and, therefore, the Government decided to set up and construct a new District Hospital at Mapusa. Accordingly, 25811 square meters of land belonging to the Education Department was released to the Health Department and on that land a 256 bedded District Hospital equipped with all modern facilities has been constructed at the cost of about Rs. 48 4 Crores. The Government, thereafter, created 200 additional posts, which included 34 Doctors, 76 Nurses and 90 other para medical staff. 136 persons have been recruited and the hospital can be commissioned for providing health care. However, the Health Minister moved a note dated 10.02.2010 requesting the Government to approve the appointment of Consultant for the District Hospital. The Cabinet, thereafter, approved the proposal and the Government has decided to hand over the development, operation and management of the District Hospital on Public Private Partnership (PPP) basis. In pursuance thereof, the Government has floated tenders and has also issued Letter of Intent. According to the petitioner and the applicants in the Misc. Civil Application (Hereinafter referred to as “Petitioners”), this action of the Government is not in public interest, which would drain the Government of his whole finance and would adversely affect health care of the citizens. Further, the petitioners have questioned the decision to privatize the District Hospital on the ground that the rules of business, which govern the conduct of business of the Government have been violated and the Consultant has not been properly selected. Apart from questioning the privatization of the District Hospital, the petitioners have also 5 questioned the terms of Draft Concession Agreement (DCA), which is proposed to be entered into by the Government with the successful tenderer i.e. Radiant Life Care Private Limited, which has been impleaded as intervenor in this proceeding. The petitioners have further questioned the decision of the Government to privatize the District Hospital at Mapusa and also the terms of the tender, which have been floated by the Government for handing over the hospital to private operator. The learned Advocate General for the State of Goa submitted that the decision to privatize the District Hospital, Mapusa is a policy decision of the Government duly taken by the Government in the best interest of citizens and it is not open for the petitioners to question the decision or the manner of its implementation. It is submitted that the petitioners have not pleaded or proved the breach of any law by the State in either taking this decision or implementing it and in the absence of any malafides, the impugned decisions cannot be questioned in a public interest litigation. 4. The learned Advocate General relied on judgment of the Supreme Court in Villianur Iyarkkai Padukappu Maiyam ..vs.. Union of India and others; (2009) 7 Supreme Court Cases 6 561. That was a challenge to the decision of the Government of Pondicherry to privatize Port. Upon taking decision to privatize, the Government had entered into a contract with the respondent for development of Port. The Supreme Court observed that the High Court had given due directions for safeguarding the environment and had protected the interests of people of Pondicherry. Therefore, the element of public interest no longer survives and it was not open for the appellant to challenge the award of the contract in favour of the respondent as this would amount to challenge the policy decision of the Government of Pondicherry through the PPP, which is not permissible. In this judgment, the Supreme Court observed as follows: “113. As far as second preliminary objection regarding locus standi of the appellant to challenge the award of the contract for the development of the Pondicherry Port to Respondent 11 is concerned, this Court finds that the contract assailed in the writ petitions is purely commercial in nature. Neither the parties, which had participated in the process of selection of the consultant/developer nor one of those, which had expressed desire to develop the Pondicherry Port but was not selected, has come forward to challenge the selection procedure adopted by the Government of 7 Pondicherry or the selection of Respondent 11 as developer of the Pondicherry Port. 114. The question of locus standi in the matter of awarding the contract has been considered by this Court in BALCO Employees' Union v. Union of India. This Court, after review of law on the point, has made following observations in para 88 of the judgment: (SCC p. 381) “88. It will be seen that whenever the Court has interfered and given directions while entertaining PIL it has mainly been where there has been an element of violation of Article 21 or of human rights or where the litigation has been initiated for the benefit of the poor and the underprivileged who are unable to come to court due to some disadvantage. In those cases also it is the legal rights which are secured by the courts. We may, however, add that public interest litigation was not meant to be a weapon to challenge the financial or economic decisions which are taken by the Government in exercise of their administrative power. No doubt a person personally aggrieved by any such decision, which he regards as illegal, can impugn the same in a court of law, but, a public interest litigation at the behest of a stranger ought not to be entertained. Such a litigation cannot per se be on behalf of the poor and the downtrodden, unless the court is 8 satisfied that there has been violation of Article 21 and the persons adversely affected are unable to approach the court.” From the passage quoted above it is clear that the only ground on which a person can maintain a PIL is where there has been an element of violation of Article 21 or human rights or where the litigation has been initiated for the benefit of the poor and the underprivileged who are unable to come to the court due to some disadvantage. 115. On the facts and in the circumstances of the case, this Court is of the view that the only ground on which the appellants could have maintained a PIL before the High Court was to seek protection of the interest of the people of Pondicherry by safeguarding the environment. This issue was raised by the appellants before the High Court and the High Court has issued directions regarding the same, which are to be found in para 24 of the impugned judgment. After the High Court's directions the element of public interest of the appellants' case no longer survives. The appellants cannot, therefore, proceed to challenge the award of the contract in favour of Respondent 11 on other grounds as this would amount to challenging the policy decision of the Government of Pondicherry through a PIL, which is not permissible. Thus on the ground of locus standi also the appeals should fail.” 9 On the scope of judicial review in the matters of policy decision and economic decisions, the Supreme Court observed as follows: “167. 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. 168. 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 interests. 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. 169. 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 10 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. 170. 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.” We find that the challenge to the policy decision to privatize the District Hospital, Mapusa has no merit and ought not to be entertained in this Public Interest Litigation. 11 5. We have, however, considered the submissions challenging the decision to enter into a PPP, and not to the terms of the RFP in public interest in order to examine if there is anything contrary to the interests of the general public since the matter affects the health of the citizens and the decision seems to have raised many apprehensions. According to the petitioners, the District Hospital, by its very nature, is a hospital which should naturally be run by the Government and cannot be handed over to a private operator. This submission is without any basis in law since the petitioners have not pointed out any duty cast on the Government by any statute of running District Hospital itself. Moreover, there is no merit in the submission that the Government should not be allowed to privatize the hospital because it has spent large amount in setting up the hospital and also appointing the staff. The Government has stated on oath that District Hospital at Mapusa was constructed in order to strengthen the existing health care facilities and the decision of privatization has been taken in public interest and to provide efficient medical services and facilities to the citizens. The Government appointed ICRA Management Consulting Services and Centrum Capital Ltd. as Consultant and the Consultants have 12 suggested a Draft Concessional Agreement, which has been adopted by the Government after due deliberation. It is specifically asserted on behalf of the Government that the policy decision has been taken by the Public Health Department and Director of Health Services, which have been consolidated and associated at every stage. It is pointed out that the disputes have been raised about the efficiency of health care provided by the Government of Goa and have been pending in this Court since quite some time and the Government has ultimately taken a policy decision to privatize one hospital at Mapusa to provide efficient health care and without suffering any additional financial burden. It is contended on behalf of the State that the Government is entitled to try out the best method of discharging the obligations imposed on it and one such attempt, which is in question in this petition, ought not to be thwarted. 6. In particular, it is pointed out on behalf of the State that the hospital will provide free medical aid and treatment to patients except where the treatment falls within the scope of Superspeciality in which case the patient will be charged at CGHS rates and not charges, which are normally levied in private 13 hospitals. That in fact the private operator is bound to charge CGHS rates wherever applicable and is not permitted to determine and charge its own rates. It is stated that the Government even otherwise incurs some expenditure by giving free treatment to people and this expenditure will be reimbursed to the private operators, who will provide medical services. Two other aspects, raised by the petitioners have also been adequately answered by the Government as follows: (i) That there will be no interruption of various national health programmes for control and preventive action in respect of Malaria, Filaria, Dengue, Chikungunia, Japaneese encephalitis, TB/HIV AIDS etc. nor any other disease. The respondents have stated that the Government implements various national health programmes in its Headquarters, such as TB Control Cell, Vector Borne Disease Control Cell, Leprosy Control Cell, Family Planning Cell etc. through various Cells, some at District Hospital and some at village level. (ii) The service conditions of the Government Employees will not be adversely affected in any way. The Government has given options to its employees to be absorbed at the District Hospital under the private operator whereupon they will be sent on 14 deputation and disciplinary control etc. will remain of the Government. This, in our view, substantially answers the requirement of public interest and we do not consider it appropriate to go into the question, whether the Government would save more money if it continues to run the hospital on its own and whether it should have to be the concession at the private operator on terms, which are commercially more beneficial to the Government or otherwise. These are essentially commercial matters, which this Court would not enquire into in a public interest litigation. 7. The learned Advocate General rightly relied on the decision of the Supreme Court in G. B. Mahajan and others ..vs.. Jalgaon Municipal Council and others; (1991) 3 Supreme Court Cases 91 where the Supreme Court gave judicial recognition to the administrative right to trial and error as long as both trial and error are bonafide and within the limits of the authority in the following words: “22. On a consideration of the matter, it appears to us that the argument that a project envisaging a self- financing scheme, by reason alone of the particular policy behind it, is beyond the powers of the local 15 authority is somewhat too broadly stated to be acceptable. A project, otherwise legal, does not become any the less permissible by reason alone that the local authority, instead of executing the project itself, had entered into an agreement with a developer for its financing and execution. The criticism of the project being ‘unconventional’ does not add to or advance the legal contention any further. The question is not whether it is unconventional by the standard of the extant practices, but whether there was something in the law rendering it impermissible. There is, no doubt, a degree of public accountability in all governmental enterprises. But, the present question is one of the extent and scope of judicial review over such matters. With the expansion of the State's presence in the field of trade and commerce and of the range of economic and commercial enterprises of government and its instrumentalities there is an increasing dimension to governmental concern for stimulating efficiency, keeping costs down, improved management methods, prevention of time and cost overruns in projects, balancing of costs against time scales, quality control, cost-benefit ratios etc. In search of these values it might become necessary to adopt appropriate techniques of management of projects with concomitant economic expediencies. These are essentially matters of economic policy which lack adjudicative disposition, unless they violate constitutional or legal limits on power or have 16 demonstrable pejorative environmental implications or amount to clear abuse of power. This again is the judicial recognition of administrator's right to trial and error, as long as both trial and error are bona fide and within the limits of authority. We might recall the memorable words of what Justice Brandeis said: “The discoveries in physical science, the triumphs in invention, attest the value of the process of trial and error. In large measure, these advances have been due to experimentation ....” “... There must be power in the States and the Nation to remould, through experimentation, our economic practices and institutions to meet changing social and economic needs ....” “To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the Nation. It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country. This Court has the power to prevent an experiment .... But in the exercise of this high power, we must be ever on our guard, lest we erect our prejudices into legal principles.” 17 23. In regard to courts and policy we might recall the following words of a learned author:- “The courts are kept out of the lush field of administrative policy, except when policy is inconsistent with the express or implied provisions of a statute which creates the power to which the policy relates or when a decision made in purported exercise of a power is such that a repository of the power, acting reasonably and in good faith, could not have made it. In the latter case, ‘something overwhelming’ must appear before the court will intervene. That is, and ought to be, a difficult onus for an applicant to discharge. The courts are not very good at formulating or evaluating policy. Sometimes when the courts have intervened on policy grounds, the court's view of the range of policies open under the statute or of what is unreasonably policy has not won public acceptance. On the contrary, curial views of policy have been subjected to stringent criticism. In the world of politics, the court's opinions on policy are naturally less likely to reflect the popular view than the policies of a democratically elected government or of expert administrators ....” “The considerations by reference to which the reasonableness of a policy may be determined are rarely judicially manageable...”(emphasis supplied) 18 24. In Forward Construction Co. v. Prabhat Mandal (Regd.)- a similar self-financing project was embarked upon by the Municipal Corporation of Bombay. It is true, the present argument as to the manner of execution of the project being ultra vires the powers of the local authority was not in terms raised there. But some of the arguments have a familiar ring. This Court, noticing the financial feature of the scheme observed: (SCC p. 115, para 32) “The mere fact that the Corporation was to make a gain of the non-refundable premium did not mean that that was the only purpose which was in view. The purpose obviously was the best utilisation of the available space. If in a commercial zone the Corporation was able to make available accommodation for commercial purposes we do not see why such a venture cannot be one either for the purpose of promoting public safety, convenience or in the nature of facilities being made available as a part of the improvement of the city. If commercial activities are to be pin-pointed in a commercial zone and for that purpose the Municipal Corporation takes a step to provide accommodation for commercial purposes it cannot be said that the property of the Corporation was being acquired or held for purposes other than the purposes of the Act.” 19 25. The concern of public law is to discipline the public power by forging “legal techniques as part of the way in which public power is made operational and part of the process through which it is attempted to render such public power legitimate and to think of issues of legal regulation of public power in a way that goes deeper than particular instances and elaborate issues of general principle”. There is, however, as Professor Wade points out, ample room, within the legal boundaries for radical differences of opinion in which neither side is unreasonable. In Tameside case-Lord Denning pointed out the error of confusing differences of opinion, however strong, with unreasonableness on the part of one side or the other. Lord Diplock said that the very concept of administrative discretion involves a right to choose between more than one possible course of action upon which there is room for reasonable people to hold differing opinions as to which is to be preferred. 26. .....It appears to us that in the context of expanding exigencies of urban planning it will be difficult for the court to say that a particular policy option was better than another. The contention that the project is ultra vires of the powers of the Municipal Council does not appeal to us.” We find that the decision to privatize cannot be questioned on the ground of want of authority and is not attended to by any malafides. 20 8. The petitioners also contended that the decision