Source: Indian Express 

Introduction 

Recently Indraprastha Apollo Hospital's alleged non-compliance with its lease obligations to provide free medical treatment to economically weaker sections. The hospital, constructed on 15 acres of government land leased at a nominal rate of Re. 1 per month, has been directed by the Supreme Court to demonstrate its fulfillment of obligations to provide free treatment to poor patients as stipulated in the original lease agreement. The Supreme Court's recent order calls for a comprehensive inspection of hospital records to determine compliance with these obligations, significant concerns about potential misuse of public resources and denial of healthcare services to vulnerable populations. 

What is the Background of the Indraprastha Medical Corporation Ltd. Thr. M.D. v. All India Lawyers Union (Delhi Unit)? 

• In 1994, a land measuring 15 acres in Delhi's Sarita Vihar was leased to Indraprastha Medical Corporation Ltd. (IMCL) and its associated entities at a nominal rate of Rs. 1 per month. The Delhi government holds a 26% stake in this venture.  
• According to the lease deed, the hospital was obligated to provide free treatment to poor patients to the extent of one-third of its bed strength and to 40% of its outdoor patients. 
• 1986: Delhi administration planned to establish a multi-disciplinary super specialty hospital on a "no profit, no loss" basis. 
• 11^th March 1988: The President of India (through the Lt. Governor of Delhi) entered into a Joint Venture Agreement with Apollo Hospital Enterprises Ltd., stipulating that the proposed company would provide free medical facilities to at least 33% of the total 600 beds and to 40% of OPD patients. 
• 21^st April 1988: The Delhi government and IMCL entered into a lease agreement for land on Delhi-Mathura Road at a nominal rate of Re. 1 per month. 
• July 1996: Indraprastha Apollo Hospital was partially commissioned. 
• 24^th January 1997: The Chairman of IMCL's Board of Directors mentioned that the hospital should consider commencing free patient facility, but the management took a stand that the lease deed did not obligate them to provide free medicines or consumables. 
• 10^th December 1997: All India Lawyers' Union (Delhi) filed a public interest litigation before the Delhi High Court seeking enforcement of the free treatment provisions. 
• January 1998: IMCL described itself as a "commercial venture" and disowned responsibility to provide free medical aid. 
• July 1998: A Delhi government committee found the arrangements for free treatment to be "highly unsatisfactory," with only 75 beds available instead of the required 200. 
• 12^th June 2000: A committee headed by Justice A.S. Qureshi found that only about 20 beds out of 650 were used for free patients, concluding that the hospital had violated the stipulated conditions. 
• 5^th March 2003: A court-appointed committee reported "glaring deficiencies" and "discriminatory treatment" for poor patients, with only 18.45% of beds available for the poor. 
• 22^nd September 2009: The Delhi High Court directed the hospital to admit and treat free patients without charging for any expenses, including consumables and medicines. 
• November 2009: IMCL challenged the order in the Supreme Court. 

What is the Current Litigation Status? 

• The Supreme Court is currently hearing an appeal by IMCL challenging the 2009 Delhi High Court order.  
• The Court has observed that the original 30-year lease from 1994 has now expired and has called for a joint inspection by the Delhi government and Union of India to ascertain compliance with the free treatment obligations. 

What is the Supreme Court Observation and Direction? 

• The Court noted that the hospital management refused to adhere to its obligation to provide free treatment to poor patients, despite clear stipulations in the lease deed. 
• The Court questioned whether even the benefits as per Paragraph 'P' of the Special Leave Petition (regarding 200 free beds) have been granted to poor patients. 
• The Court noted that the original 30-year lease period now stands expired. 
• The Court has directed the Government of NCT of Delhi and the Union of India (Ministry of Health and Family Welfare) to submit a joint comprehensive status report addressing:  
  • Whether the lease has been renewed, and if so, on what terms. 
  • What recourse has been initiated to restore the government land if the lease has not been renewed. 
  • The total bed strength and records of outpatient footfall for at least the past 5 years. 
  • How many poor patients have received indoor or outdoor treatment during at least the last 5 years. 
• The Court has directed the hospital management to cooperate fully with the expert committee and produce all relevant records. 
• The Court has orally warned that if the hospital does not comply with its obligations to provide free treatment, its management would be handed over to the All India Institute of Medical Sciences (AIIMS). 
• The Court lamented that the hospital, which was to run on a "no-profit, no-loss" formula, had turned into a commercial venture where poor patients could not afford treatment. 
• When informed that the Delhi government, with its 26% shareholding, also profited from the hospital's earnings, Justice Kant remarked that this was "most unfortunate." 

What is the Financial Implication ? 

• According to hospital figures submitted to the Delhi High Court, expenditure on consumables and medicines was Rs. 186 crores out of the total hospital revenue of Rs. 391.19 crores. 
• In contrast, G.B. Pant Hospital, a government-run super specialty hospital with 600 beds, spent only around Rs. 23 crores in 2008 on consumables and medicines. 
• IMCL has claimed that the cost of free medicines and medical consumables alone would cost approximately Rs. 67 crores annually, whereas their profit for the year ending March 31, 2009, was Rs. 24 crores. 
• The hospital has argued that providing free medicines and consumables would negatively impact the dividends of its approximately 35,000 ordinary shareholders. 

Conclusion  

This case represents a significant examination of the obligations of private healthcare entities that receive public resources through subsidized land leases. The Supreme Court's intervention highlights the tension between commercial healthcare ventures and their social responsibilities, particularly when public resources are involved. The Court's direction for a comprehensive audit of the hospital's compliance with its free treatment obligations will likely set an important precedent for similar arrangements across the country.