Allowed

State of Rajasthan v. C.R.D. Healthcare Private Ltd. Jaipur

Rajasthan HC23 Nov 2021SAW/1159/2019

Case brief

AI extract

What is this about?

The Division Bench set aside the Single Judge's order allowing the petitioner's writ petition challenging the cancellation of a PPP agreement for running a Community Health Centre.holding that such disputes fall under the arbitration clause and are commercial matters, directing the State to return machinery installed at the petitioner's cost.

What did the court decide?

Impugned order dated 21.12.2018 set aside; directive to return machinery installed at petitioner's cost within four weeks.

State of Rajasthan Vs C.R.D. Healthcare… — Contract and Commercial Disputes | Rajasthan HC (2021)

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HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR

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D.B. Spl. Appl. Writ No. 1159/2019

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State of Rajasthan, Through Chief Secretary Medical and Health Department, Secretariat, Jaipur.

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The Director, Rajasthan Public Health And Medical Department, Ministry Of Health And Family Welfare, Government Of Rajasthan, Jaipur.

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Additional Director (Administration), Medical And Health Service, Rajasthan, Jaipur.

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Chief Medical And Health Officer, Barmer (Rajasthan)

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----Appellants

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Versus

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C.R.D. Healthcare Private Ltd. Jaipur, (Changed Teh name Brzee Care Private Limited) CHC Gudamalani, District Barmer (Rajasthan) Through Its Director.

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----Respondent

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For Appellant(s)	:	Mr. Pankaj Sharma, AAG with Mr. Deepak Chandak,AGC
For Respondent(s)	:	Mr. Sidharth Joshi, Mr. Khet Singh

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HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SUDESH BANSAL

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Judgment

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23/11/2021

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This appeal has been filed by the State Government to challenge the judgment of the learned Single Judge dated 21.12.2018.

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The respondent-original petitioner is a company registered under the Companies Act. The State Government had entered into an agreement with the original-petitioner on 25.05.2015 for running the Community Health Centre at Gudamalani (for short, ‘CHC’) on PPP basis for a period of five years. The agreement

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(2 of 4)

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[SAW-1159/2019]

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contained detailed terms and conditions and bilateral obligations of the two sides. This agreement contained an arbitration clause providing that in case of dispute arising between the parties, the same will be referred for arbitration.

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It appears that the State authorities were not satisfied with the manner in which the CHC was being managed by the petitioner. First notice, therefore, came to be issued on 12.08.2016, in which it was conveyed to the petitioner that the complaints of proper facilities not being provided at the CHC have come to light in a public interest litigation filed before the High Court. Second, notice was issued on 24.08.2016 conveying to the petitioner that the CHC is being run in contravention of the terms and conditions of the agreement and several facilities for medical treatment promised have not yet been provided. The petitioner should explain the short-comings before 31.08.2016. The petitioner responded to these notices under letter dated 29.08.2016 and refuted the allegations. Unmoved by such explanation, the State authorities issued an order dated 03.10.2016 cancelling the agreement of the petitioner. The petitioner thereupon approached the High Court. Before the High Court, the State filed a reply suggesting that there were allegations of over-charging for treatment also. The learned Single Judge by the impugned order allowed the writ petition. The learned Single Judge was of the opinion that the petitioner was providing proper health care facilities and recorded that the Government authorities have virtually admitted that after the revocation of the agreement, the State authorities had failed to provide medical facilities at the CHC as comparable to what the petitioner was offering. It was also recorded that during such

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(3 of 4)

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[SAW-1159/2019]

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period, no female nurse was posted at the CHC in the last two years. In the opinion of the learned Single Judge, this amounted to utter failure on the part of the State Government to provide health care facilities to the citizens in the remote areas. The learned Single Judge rejected the stand of the State Government that the CHC was not properly functioning and there were many short-comings on the part of the petitioner. The allegation of over-charging was also not accepted.

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In our opinion, the court in the writ petition had limited jurisdiction to examine the issues. Firstly, there was an arbitration clause in the agreement between the parties. This does not mean that the writ petition was not maintainable. It is a question whether in the face of such arbitration clause, the petition should be entertained. Secondly, several issues were in the realm of disputed questions of fact. Thirdly, on the premise that after the petitioner’s agreement was terminated, the State Government failed to provide comparable medical services, was not borne out from any material on record and in any case, cannot be the consideration for setting aside the order of cancellation of the agreement. Lastly, these are principally the issues in the realm of commercial and contractual relations of the State with the private individuals. If the petitioner was of the opinion that the cancellation of the agreement was not based on correct facts and which resulted into loss of capital investment or loss of prospective income, the petitioner had to file an appropriate proceeding before the competent court.

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Learned counsel for the petitioner submitted that the petitioner may consider filing appropriate proceedings and in which the question of limitation may be viewed from the angle

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(4 of 4)

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[SAW-1159/2019]

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that the petitioner was bona fide pursuing the remedy before the competent court. With this aspect of the matter, we offer no comments.

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Before closing, it is recorded that in any case, the State Government cannot retain the machinery which the petitioner may have installed at his own cost. It is therefore, directed that if the petitioner has installed the machinery at his own cost, the State Government shall return the same within four weeks from today.

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With the aforesaid observations and directions, the appeal is disposed of. The impugned order dated 21.12.2018 stands set aside.

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(SUDESH BANSAL),J (AKIL KURESHI),CJ

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82-MohitTak/-

State of Rajasthan v. C.R.D. Healthcare Private Ltd. Jaipur

Case brief

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State of Rajasthan v. C.R.D. Healthcare Private Ltd. Jaipur

Case brief

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