Delhi Govt to SC: Apollo refusing to treat poor, auction recommended

The affidavit by Dr Vatsala Aggarwal, Director General, Directorate of Health Services, Government of the NCT of Delhi, was submitted on January 27, counsel for Delhi government Swati Ghildiyal told The Indian Express. Counsel for Apollo Hospital Lalit Bhasin declined to comment saying the matter is sub judice.

The matter, Indraprastha Medical Corporation Ltd vs All India Lawyers’ Union (Delhi Unit), was listed for hearing on January 28, but was not taken up. The court is expected to hear the matter next on March 19.

“…The issue of renewal of lease was considered by the competent authority and the competent authority has decided to not accord further extension of the Joint Venture Agreement or the Lease Deed and has desired that the Department be advised to float a Request for Proposal (RFP) for long-term leasing of the land, building & equipment, on an ‘as is where is’ basis, for running of the said hospital on a licence fee model,…with a first right of refusal to IMCL,” says the affidavit.

This effectively means that the government will undertake an auction process, at the end of which a different management could end up running the hospital.

The competent authority has directed the Delhi government that the process should be initiated “by engaging a transaction advisor, preferably Government”, and that it “shall be completed within a maximum period of two months, with due notice to Apollo Hospital”.

In the meantime, Apollo will continue to run the hospital to ensure that no inconvenience is caused to the public.

The Delhi government’s submission has come almost 10 months after the SC warned the hospital in Sarita Vihar that its operations would be handed over to the All India Institute of Medical Sciences (AIIMS) if it did not provide free treatment to poor patients. As per the agreement between the hospital and the Delhi government, 40% of OPD patients and 33% of IPD patients are to be treated for free under the EWS category.

The court had issued the warning while hearing an appeal by IMCL, which runs the hospital, challenging a Delhi High Court order from 2009, which said the hospital had been flouting these terms of the agreement.

The government had leased 15 acres of land in Jasola village on Mathura Road to IMCL in July 1993 at the rate of Re 1 per month.

“In addition [to the land], financial assistance amounting to Rs 16 crore was provided for construction of the hospital, and Rs 23.38 crore was invested towards acquisition of 26% equity shareholding in to Indraprastha Medical Corporation Limited (IMCL),” says the affidavit.

Institutions like hospitals and schools, which get land from the government on concessional rates, are obligated by the terms of the lease to provide free services to the EWS. The percentage of beds or seats that are reserved in each institution varies according to the terms of the individual agreement.

According to the joint venture agreement of 1988 and the terms of the lease, IMCL was obligated to provide free treatment to EWS patients “to the extent of 40% of OPD patients and 33% of IPD patients”.

However, an expert committee constituted on the orders of the SC found that only about 9-10% of OPD patients and 7-9% of IPD patients were provided free treatment at the hospital.

The lease with IMCL expired on July 31, 2023, and the joint venture agreement with Apollo Hospitals Enterprise Limited (AHEL) expired on March 10, 2018, the government has informed the court.

The litigation began in 1997 when the All India Lawyers’ Union (Delhi) filed a petition in the Delhi High Court seeking directions to ensure free medical treatment in terms of the lease agreement of 1994 between the Delhi government and IMCL.

In 2003, a committee constituted by the HC flagged “glaring deficiencies in the arrangements and discriminatory treatment” for poor patients, and recorded that the hospital had provided free OPD treatment to less than 0.001% of patients until then.

In September 2009, the HC directed the hospital to admit and treat patients for free, and imposed a cost on IMCL for raising frivolous objections.

IMCL challenged the order in the SC in November 2009. It submitted that the cost of free medicines and medical consumables alone would come to approximately Rs 67 crore annually, whereas the profit for the year ending March 31, 2009, was only Rs 24 crore.

It also asked whether the interests of 35,000 ordinary shareholders representing the general public could be sacrificed by adding on this large liability, “thereby completely wiping out or reducing the dividends”.

In March 2025, an SC Bench of Justice Surya Kant (now the Chief Justice of India) and Justice N Kotiswar Singh warned, “If we find out that poor people are not provided free treatment, we will hand over the hospital to AIIMS.”