SWADHI HEALTH MANAGEMENT LLP. Vs. STATE OF SIKKIM

JUDGEMENT

(1.) The root of strife between the Petitioners and the Respondents pivots around the alleged non-payment of Rs.5,90,00,000.00 (Rupees five crores and ninety lakhs) only, towards administration, facilitation and management of the Su-Swastha Yojana, through Su-Swastha Facilitation Centre, for the financial year 2021-22, to the Petitioner No.1 by the State-Respondents.

(2.) The Petitioners' case, very briefly summarised, is that, the Government sought to launch a Health Scheme for Sikkim Government employees and their dependent family members with the purpose of providing cashless medical treatment. Su-Swastha Yojana was therefore conceived and a Tender floated by the Respondents No.1 and 2 on 2/11/2020, to Award the Contract for the Su-Swastha Yojana Facilitation Centre. The Contract was awarded to the Petitioner No.1 by the Respondents No.1 and 2 after completion of all necessary formalities. The Work Order, bearing No.108/H&FW, dtd. 4/2/2021, was issued by the Respondents No.1 and 2 in favour of the Petitioner No.1, confirming that the Government of Sikkim had approved the implementation of SuSwastha Yojana Scheme by the Petitioner No.1 and the Government had accepted to operationalise the Facilitation Centre. One room was allotted to the Petitioners to set up the Facilitation Centre vide Office Order, bearing No.3014/H&FW, dtd. 5/2/2021. The work commenced on an urgent basis as per the verbal instructions of the Respondents No.1 and 2, consequent upon which the operation of the Facilitation Centre and the Su-Swastha Yojana was taken up by the Petitioners at their own costs and expenses without lapse in terms of Clause 3 of the Contract. With the launch of this Scheme, more than 84,000 (eighty-four thousand) beneficiaries were enrolled in the Su-Swastha Yojana. In the meanwhile, the Service Contract Agreement was also finalised between the Petitioners and the Respondents. Clause 5 of the Contract mentioned that Rs.5,90,00,000.00 (Rupees five crores and ninety lakhs) only, including GST, being an amount of minimum guaranteed consideration, is payable to the Petitioners. The Sikkim Su-Swastha Yojana (Employees Health Scheme) Rules, 2021, were notified by the Respondents No.1 and 2, vide Notification No.237/H&FW, dated 22- 06-2021, while the existing Sikkim Services (Medical Facilities) Rules of 1981 were repealed. The Government Departments were directed to deduct contributions of the Government employees, from their monthly salaries of September, 2021, vide Circular issued by Respondent No.4, dtd. 7/9/2021. A Demand Notice dated 23- 08-2021 was served by the Petitioners to the Respondents No.2 and 3, requesting them to release payment to the Petitioners in terms of the Contract and a Reminder issued on 7/9/2021. This was followed by another Demand Note, dtd. 6/10/2021, served on the Respondent No.2, however no payments were made by the Respondents for services rendered by the Petitioner No.1 in the financial year 2021-22. The Respondents thus failed to pay the minimum guaranteed amount in terms of the Contract. A Right to Information Act, 2015, application came to be filed by the Petitioner, dtd. 29/6/2022, with the Respondents No.1, 2 and 4, in order to obtain necessary documents pertaining to the said Scheme. Respondent No.2 sent a response on 10/8/2022, whereby a copy of the Contract was provided by the Respondents. The responses brought to light that no budgetary allocation was provided by Respondent No.1 in the budget of the Respondent No.2 Department, for the financial year 2021-22, nor expenditure incurred for the Scheme for that same year, indicating the intention of the Respondents never to discharge their contractual obligation towards the Petitioners. Hence, the prayers in the Writ Petition, viz., (i) allow the Petition and issue a writ of Mandamus or any other appropriate writ, order or directions thereby directing the Respondents to make the payment of Rs.5,90,00,000.00 (Rupees five crores and ninety lakhs) only, towards administration, facilitation and management of the Su-Swastha Yojana through Su-Swastha Facilitation Centre for the financial year 2021-22 to the Petitioner No.1, at the earliest;

(3.) Learned Counsel for the Petitioners advancing his verbal arguments delved at length into the terms of the Contract, more specifically to the terms providing for payment of the minimum guaranteed consideration of Rs.5,90,00,000.00 (Rupees five crores and ninety lakhs) only, every financial year. It was canvassed that the Respondents have acted in an arbitrary and perverse manner, contrary to the well-established principles of law governing the performance of statutory Contract by non-payment of the minimum guaranteed consideration. That, the instrumentality of the State cannot commit a breach of a solemn undertaking to the prejudice of the other party, which acted on that undertaking and put itself in a disadvantageous position, incurring expenditure towards rendering services. That, the doctrine of estoppel in such circumstances kicks into place. Strength on this facet was drawn from SVA Steel ReRolling Mills Limited and Others vs. State of Kerala and Others,(2014) 4 SCC 186. That, if a person aggrieved by a breach of Contract shows that though the breach is in the realm of Contract, the duty sought to be enforced is a constitutional or statutory duty, the remedy of a writ of mandamus may not be refused. It is the constitutional obligation of the High Court under Article 226 of the Constitution to enforce such duties. Besides, the Respondents have not alleged doctrine of frustration or temporary suspension due to any fault of the Petitioners, therefore, they are bound by estoppel to make payments.