Dismissed¶22

Dialysis Service Providers Association v. Union of India through Its Secretary Ministry of Health and Family Welfare

Bombay HC30 Apr 2025WP/3229/2024

Case brief

AI extract

What is this about?

Dialysis Service Providers Association v Union of India; Bombay HC Writ Petition 3229 of 2024; MOU 29 April 2024 State/NHM with HLL Lifecare (PSU); RFQ 7 May 2024 Strategic Partner empaneled firms; hemodialysis 367 Government Health Facilities Maharashtra; nomination without tender; arbitrariness; CVC guidelines open tendering; RTI Act 2005; continuous empanelment; EoI 3 June 2022; Notification of Award 18 July 2024; public interest free dialysis rural poor; petition dismissed no costs; Alok Aradhe CJ; Sandeep V. Marne J.

What did the court decide?

Petitioner challenged the MOU without procuring a copy or ascertaining its date/contents; failure to undertake basic homework (including RTI) is itself a fit ground for rejection of the prayer challenging the MOU. ¶15

Dialysis Service Providers Association vs Union of India through Its Secretary Ministry of Health and Family Welfare — Bombay HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

Dismissed

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Issue for consideration

Whether nomination of Respondent No.3 (HLL Lifecare Limited) by Respondent No.2-State of Maharashtra, via MOU dated 29 April 2024 without any tender process, as sole agency for implementation of free dialysis services at 367 Government Health Facilities is arbitrary and illegal. +1 more

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Court's answer

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Ratio / Principle

Selection of Respondent No.3, a Public Sector Undertaking wholly owned by the Government of India, by the State Government for implementing the dialysis project is an arrangement between the Government and its instrumentality, containing no element of arbitrariness or irrationality.

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Key takeaways

There is no merit in the Petitioner-Association's challenge to the impugned MOU dated 29 April 2024.ratio¶19
The grievance of denial of opportunity in the RFQ is baseless: though bidding was limited to empaneled entities, empanelment is a continuous process and nothing prevented the Petitioner's members from getting empaneled on satisfying eligibility criteria; they neither participated in the 3 June 2022 EoI nor ever applied thereafter.ratio¶20

Detailed headnote1 paragraphs

Bombay High Court (OOCJ), Coram: Alok Aradhe, CJ. and Sandeep V. Marne, J.; order per Sandeep V. Marne, J.; W.P. No. 3229 of 2024, decided 16 June 2025 — Dialysis Service Providers Association v. Union of India & Ors. An association of seven dialysis service providers challenged (i) the MOU dated 29.04.2024 between the State of Maharashtra (through Commissioner, Health Services and Mission Director, NHM) and HLL Lifecare Ltd., a wholly owned PSU of the Government of India, for setting up dialysis centers at 367 Government Health Facilities without a tender process, (ii) the RFQ dated 07.05.2024 confining bids for Strategic Partner to HLL-empaneled firms, and (iii) the Notification of Award dated 18.07.2024 to Respondent Nos.5 and 6. HELD: selection of a Government instrumentality (PSU) by the State for a rural free-dialysis project is an arrangement between the Government and its instrumentality with no arbitrariness or irrationality; the petitioner challenged the MOU without even obtaining or reading it, and that failure of basic homework alone justified rejection of that prayer; empanelment with Respondent No.3 is a continuous process and the members neither joined the 03.06.2022 EoI nor ever applied later; private commercial interests cannot override the public interest in free dialysis for the rural poor. Petition dismissed without costs.

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Neeta Sawant 12-WP-3229-2024-FC.docx

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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WRIT PETITION NO. 3229 OF 2024

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Dialysis Service Providers Association ....Petitioner

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: Versus :

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Union of India & Ors. ....Respondents

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Mr. Vishal Kanade with Mr. Durgesh Rege, for the Petitioner.

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Ms. P.H. Kantharia, Government Pleader with Ms. Jyoti Chavan, Additional GP and Mr. Amar Mishra, AGP, for Respondent No.2-State.

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Dr. Milind Sathe, Senior Advocate with Mr. Bhushan Deshmukh, Mr. Ravi Gandhi, Mr. Mahek Kamdar, Mr. Hersh Choksi, Mr. Prathamesh Jadhav and Ms. Deshna Gala i/b M/s. Kanga & Co., for Respondent No.3.

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Mr. V.R. Dhond, Senior Advocate with Mr. Akshay Patil, Mr. Gaurav Jangle and Ms. Akshita Jain i/b M/s. I.V. Merchant & Co., for Respondent Nos.5 and 6.

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CORAM : ALOK ARADHE, CJ. &

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SANDEEP V. MARNE, J.

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DATED : 16 JUNE 2025.

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ORDER : (Per Sandeep V. Marne, J.)

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1) The petition is filed by the Petitioner Association formed by 7 dialysis service providers spread across the country, challenging the Notice inviting Request for Quote ( RFQ ) floated by the Respondent No.3 for selection of Strategic Partner from amongst empaneled firms

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Page No.1 of 12

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16 June 2025

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for Hemodialysis Services projects in the State of Maharashtra. The Petitioner-Association has also challenged the Memorandum of Understanding (MOU) executed by the State Government in favour of Respondent No.3 by awarding the work of setting up of dialysis centers at 367 Government Health Facilities. In addition to challenging nomination of Respondent No.3 by the State Government for implementation of programmes of dialysis centers at 367 Government Health Facilities, the Petitioner is also aggrieved by Respondent No.3 selectively considering participation of only empaneled entities for selection of Strategic Partner for implementation of the programme. Petitioner has also challenged the contract awarded by Respondent No.3 to Respondent Nos.5 and 6 in pursuance of the impugned RFQ.

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2) Brief facts leading to filing of the petition are that Petitioner claims to be an association espousing the cause of dialysis service providers across the country and has seven members as named in para2 of the petition. Petitioner claims that its members are empaneled with Central Government Health Schemes (CGHS) and have been successful in providing diagnostic and hemodialysis related services to the patients across India. Respondent No.3-HLL Lifecare Limited is a wholly owned Public Sector Undertaking of the Government of India and according to the Petitioner, its activities are essentially restricted to manufacture of health related products such as sanitary pads, condoms, re-hydration salts, blood transfusion equipment and wound care products, blood banking equipment, neo-natal care equipment and surgical and health care products. It also provides health care services, clinical pathology related and diagnostic imaging services.

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3) Respondent No.2-State of Maharashtra executed Memorandum of Understanding ( MOU ) with Respondent No.3 for setting up Dialysis Centers at 367 Government Health Facilities by

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furnishing the space allotted by the respective facilities and deploying 1950 dialysis machines alongwith ancillary equipment for providing free dialysis services to the patients under the National Heath Rural Mission. Petitioner is aggrieved by Respondent No.2 nominating Respondent No.3 for implementing the programme of providing free dialysis services without implementing any tender process. Accordingly, the MOU executed between Respondent Nos.2 and 3 is under challenge in the present petition.

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4) Before execution of the MOU on 29 April 2024, Respondent No.3 explored the possibility of having Strategic Business Partners and accordingly invited Expression of Interest ( EoI ) dated 3 June 2022. The said EoI was floated on e-Procurement Portal of the Government of India and the firms which met EoI qualification criteria came to be empaneled vide panel dated 11 July 2023. The Petitioner apparently did not apply for empanelment in pursuance of the EoI dated 3 June 2022.

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5) After execution of the MOU with Respondent No.2 on 29 April 2024, Respondent No.3 floated Notice inviting RFQ for selection of Strategic Partner from empaneled firms for Hemodialysis Services Project in Maharashtra on 7 May 2024. Petitioner is aggrieved by denial of opportunity to participate in the impugned RFQ and has accordingly filed the present petition not only challenging the impugned RFQ but also questioning the action of Respondent No.2State Government in executing the MOU with Respondent No.3 without implementing the tender process. During pendency of the present petition, the process of selection of Strategic Partner vide impugned RFQ has been completed and Respondent Nos.5 and 6 have been awarded contract by Respondent No.3 vide Notification of Award dated 18 July 2024, which is also made subject matter of challenge by the Petitioner by amending the petition.

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6) We have heard Mr. Kanade, the learned counsel appearing for the Petitioner-Association. He would submit that the execution of the MOU by Respondent No.2-State Government in favour of Respondent No.3 without implementation of tender process is arbitrary and illegal. That Respondent No.3 could not have been selectively nominated by the State Government for implementation of the Project. That the National Rural Health Mission, Maharashtra ought to have floated tenders for selecting the agency for implementation of the Project which would have ensured fair competition, better price and significant savings for the public exchequer. That the exchequer has faced financial loss due to selective nomination of Respondent No.2 as additional commission of 8% is payable to Respondent No.3.

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7) Mr. Kanade would further submit that Respondent No.2 lacks the relevant expertise in providing dialysis services. That the affidavits filed by Respondent No.3 or the replies given under the Right to Information Act, 2005 did not spell out that the third Respondent has substantial or credible expertise in delivering dialysis services. That therefore selective nomination by Respondent No.3 by excluding other experienced entities is clearly arbitrary.

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8) Mr. Kanade would further submit that the illegality committed by the Respondent No.2-State Government in nominating Respondent No.3 without tender process is compounded by Respondent No.3 by proceeding to select Strategic Partner only from amongst its own empaneled entities by conducted a closed tender process. That Respondent Nos. 5 and 6 have been selected as a Strategic Partner by Respondent No.3 primarily on account of commercial arrangement favouring Respondent No.3 rather than on merit or capability. Mr. Kanade would accordingly pray for setting aside the

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impugned MOU, the impugned RFQ as well as letter of awards made in favour of Respondent Nos.5 and 6.

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9) The petition is opposed by Dr. Sathe, the learned Senior Advocate appearing for Respondent No.3. He would submit that Respondent No.2 is a wholly owned company of the Central Government under the administrative control of Ministry of Health and Family Welfare. That it has vast expertise of providing health care services to public at large including manufacturing of contraceptives, personal hygiene products, women healthcare products, procurements of hospital products, pharmaceuticals, facilities of laboratory services and developing of infrastructure of various hospitals etc. That it has diagnostic chain under the brand name HINDLABS which has been operating since the year 2008 having extensive network across the country. He would deny the contention of the Petitioner about Respondent No.3 lacking the necessary expertise for providing dialysis services contemplated in the programme implemented by the Second Respondent-State Government. He would take us through the Affidavit in Reply to explain the background in which the MOU dated 29 April 2024 was executed between Respondent Nos.2 and 3. That Respondent No.3 is chosen for implementation of the Project being a Public Sector Company since dialysis services are to be provided in rural areas of Maharashtra State. He would demonstrate the expertise of Respondent No. 3 in implementing large scale projects. He would therefore submit that there is nothing arbitrary or irrational on the part of the second Respondent in choosing Respondent No.3 as an agency for implementation of free dialysis service programmes. He would further submit that the Petitioner did participate in the empanelment process initiated by the third Respondent vide EoI dated 3 June 2022. He would therefore submit that the empanelment by Respondent No.3 is an ongoing process and any new service provider, including

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Neeta Sawant

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Petitioner’s members, can be empaneled with Respondent No.3 if the qualification criteria is satisfied. Therefore, the contention of the Petitioner that its members are denied opportunity of participating in the impugned RFQ is factually incorrect. That therefore it was open for the members of the Petitioner-Association to have themselves empaneled by satisfying the selection criteria and participate in the impugned RFQ. Having not availed the opportunity, the Petitioner and its members are estopped from challenging the process initiated for selection of Strategic Partner vide the impugned RFQ. He would submit that seven firms had participated in the empanelment process initiated vide EoI dated 3 June 2022. Thereafter EoI was expanded in which additional five firms participated. Out of the said 12 firms participated in the EOI, 11 firms were found to be eligible and came to be empaneled. That after finisalisation of the impugned RFQ, Notification dated 11 June 2024 was issued in favour of Respondent Nos.5 and 6. That the implementation of the Project has commenced and by the time the Affidavit dated 15 March 2025 is filed, 15 Centers were made operational with 194 beds and total number 6349 dialysis sessions were performed by the end of April 2025. The number of operational Centers were to go upto 87 with 460 operational beds. That the expenditure to the tune of Rs.25 crores was incurred by the time the said additional affidavit was filed with estimated costs would go upto Rs.350 crores for operationalization of all the Centers. He would therefore submit that it is too late in a day to interfere in implementation of the Project which is aimed at providing free dialysis services to the poor and needy citizens. He would pray for dismissal of the petition.

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10) We have also heard Ms. Kantharia, the learned Government Pleader appearing for Respondent No.2-State who would justify selection of a Public Sector Undertaking, being Respondent No.3, for implementation of dialysis service provider program in rural hospitals

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across the State. That Respondent No. 3 possesses the necessary expertise of providing diagnostic and laboratory related services as it has implemented projects of large magnitude. That since Project undertaken by the State Government is of large magnitude, a decision was taken to implement the same through the Public Sector Undertaking by the State Government. That therefore there is nothing arbitrary or irrational in Respondent No. 2 implementing the Project through Respondent No3. She would pray for dismissal of the petition.

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11) Mr. Dhond, the learned Senior Advocate appearing for Respondent Nos.5 and 6, who are awarded Notification of Award dated 18 July 2024, would also oppose the petition. He would take us through the Affidavit-in-Reply dated 19 April 2025 filed on behalf of Respondent No.5 to apprise us about inauguration of several dialysis centers set up by his clients after issuance of the impugned Notification of Award. He would submit that Respondent Nos.5 and 6 possess the necessary expertise and financial capabilities for implementation of the Project of Respondent No.2 by acting as a Strategic Partner of Respondent No.3. He would submit that since implementation of the Project has already commenced by incurring huge expenditure, it would be against the interest of Respondent Nos.5 and 6 as well as against the public interest to entertain the present petition at the instance of private entities who are putting a spoke in smooth implementation of the Project initiated by the State Government. He would pray for dismissal of the petition.

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12) Rival contentions of the parties now fall for our consideration.

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13) The petition is filed by an association formed by seven entities, who are alleged dialysis service providers spread across the country. The Petitioner-Association is essentially aggrieved by -

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(i) the act of Respondent No.2-State Government in nominating Respondent No.3 as a sole agency for implementation of free dialysis services in 367 Government Health Facilities without implementation of tender process; and

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(ii) Respondent No.3 restricting the process for selection of Strategic Partner by considering the bids of only agencies empaneled by it, thereby denying opportunity to the Petitioner’s members to participate in the impugned RFQ.

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14) So far as the first grievance of the Petitioner is concerned, it has challenged the MOU executed between Respondent Nos.2 and 3 for implementation of the Project of providing free dialysis services in the Rural Health Care Centers. It must be observed at the very outset that though the Petitioner has challenged the said MOU, it was not even aware of the date of its execution nor has it produced copy of the said MOU alongwith the petition. The MOU is thus challenged without even bothering to go through its contents. Petitioner has contended in para-16 of the petition that the MOU is not available in public domain and has baldly averred that the same was executed without calling for tenders and in absence any emergency or exigency. It is alleged that execution of the MOU is contrary to the Central Vigilance Commission (CVC) guidelines as distribution of public largesse involving public money is done without following open tendering process ensuring a level playing field, fairness, equality and justice.

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15) In our view before raising these bald allegations, the Petitioner-Association ought to have gathered some information about the background in which the MOU dated 29 April 2024 was executed between Respondent Nos.2 and 3. Respondent No.2 is State

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Government whereas Respondent No.3 is a Public Sector Understanding of the Central Government, both being Instrumentalities of the State. Petitioner could have procured copy of the said MOU as well as relevant information about the background in which it was executed, by applying for necessary information through Right to Information Act, 2005. However, without undertaking the basic homework, the Petitioner has proceeded to file the present petition challenging the said MOU without even making any efforts to procure a copy thereof. We do not appreciate this conduct on the part of the Petitioner and this alone is a fit ground for rejection of prayer challenging the said MOU.

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16) Copy of the MOU dated 29 April 2024 is placed on record by Respondent No.3. It appears that after Respondent No.2 decided to implement the Project of providing dialysis services in its Rural Health Care Centers, a proposal was submitted by Respondent No. 3 to participate in implementation of the Project. The proposal was forwarded by the Commissioner-Health Services and Mission Director to the State Government vide letter of March 2024 enumerating the details of the proposal submitted by Respondent No.3. Under the said proposal, Respondent No. 3 offered to provide services in 492 Rural Health Centers by deployment of 2447 dialysis machines upon provision of sufficient space. The machines, manpower and necessary consumables were to be provided by Respondent No.3. The State Government granted approval for implementation of the Project through Respondent No.2 subject to the conditions enumerated in letter dated 14 March 2024. Accordingly, Commissioner Health Services and Mission Director, National Rural Health Mission, Mumbai issued letter dated 15 March 2024 to Respondent No.3 conveying the approval of the State Government for implementation of the Project through Respondent No.3. It is in the above background that MOU dated

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29 April 2024 was executed between the Commissioner, Health Services and Mission Director, National Health Mission and Respondent No.3.

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17) Respondent No.3 is a Public Sector Undertaking, wholly owned by the Government of India. The State Government has considered the vast experience of Respondent No.3 in implementing projects of large magnitude across the country. Respondent No.3 has apparently set up vast network of health care service centers across the country. It has several business verticals under the brand names HINDCARE, HINDLABS etc. through which diagnostic and specialty lab services are provided throughout the country. Respondent No.2 has thus considered the expertise of Respondent No.3 and has accordingly selected it as an agency for implementation of the Project of providing dialysis services in Rural Health Care Centers. It is an arrangement executed between the Government and its instrumentality. We do not find any element of arbitrariness or irrationality in the said arrangement, particularly while deciding the petition filed by an association of seven private entities looking for business opportunity.

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18) Also of relevance is the fact that Petitioner-Association on its own never applied to the State Government for implementation of the Program initiated by it. It did not make representation to the State Government questioning execution of the MOU dated 29 April 2024. It waited till Respondent No.4 floated RFQ dated 7 May 2024 and decided to file the present petition by raising a grievance that non-empaneled entities have been excluded by Respondent No.3 from participating in the impugned RFQ.

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19) For the above reasons, we do not find any merit in the challenge raised by the Petitioner-Association to the impugned MOU dated 29 April 2024.

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20) The second grievance of the Petitioner about its members being denied opportunity to participate in the impugned RFQ is totally baseless. Though the impugned RFQ limited the bidding by only empaneled entities, Respondent No.3 has clarified in its Affidavit that the empanelment is a continuous process and nothing prevented the members of Petitioner-Association in getting themselves empaneled after satisfying the eligibility criteria. Thus, it was always possible for the members of the Petitioner to get themselves empaneled with Respondent No.3 so as to participate in the impugned RFQ process. It is an admitted position that members of the Petitioner-Association did not participate in the EoI dated 3 June 2022 issued by Respondent No.3 and thereby did not avail the opportunity of participating in the empanelment process. Since empanelment is a continuous process, there is nothing on record to indicate that any member of the PetitionerAssociation ever applied to Respondent No.2 to have themselves empaneled. There is no material on record to indicate that members of the Petitioner-Association satisfied the eligibility criteria for being empaneled with Respondent No.3. We are therefore not inclined to entertain the contention raised on behalf of the Petitioner-Association that Respondent No.2 limited the competition vide impugned RFQ to only empaneled agencies.

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21) The impugned MOU dated 29 April 2024 executed by the State Government is for implementation of vital project of providing free dialysis services at Rural Health Care Centers. The Project is of immense importance to the poor and needy patients particularly in rural areas of the State. The Project is implemented by a Public Sector Undertaking of the Central Government. It was possible for the members of the Petitioner-Association to become Strategic Partner of Respondent No.3 by getting themselves empaneled as well as by participating in the impugned RFQ. They have failed to avail the said

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opportunity. Private interests of the members of the PetitionerAssociation cannot prevail over public interest of providing dialysis services to poor and needy patients of rural areas in the State of Maharashtra. We are therefore not inclined to entertain the challenge raised by the Petitioner-Association to the impugned MOU or impugned RFQ or impugned Notification.

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22) The petition must fail. The same is accordingly dismissed without any order as to costs.

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[SANDEEP V. MARNE, J.]

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[CHIEF JUSTICE]

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Digitally signed by NEETA NEETA SHAILESH SHAILESH SAWANT SAWANT Date: 2025.06.18 21:40:56 +0530

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Page No.12 of 12 16 June 2025

Dialysis Service Providers Association v. Union of India through Its Secretary Ministry of Health and Family Welfare

Case brief

What is this about?

What did the court decide?

Dialysis Service Providers Association v. Union of India through Its Secretary Ministry of Health and Family Welfare

Case brief

What is this about?

What did the court decide?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

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