Delhi Government Recommends Auction for Apollo Hospital Over EWS Treatment Violations
The Delhi government has formally informed the Supreme Court that Indraprastha Apollo Hospital has consistently failed to meet its legal obligation to provide free treatment to Economically Weaker Sections (EWS) patients. In a significant development, the government has been advised by competent authorities to not renew the hospital's lease agreement and instead initiate an auction process for the management of the facility.
Government's Affidavit Details Contractual Breaches
According to an affidavit submitted by Dr. Vatsala Aggarwal, Director General of the Directorate of Health Services for the Government of NCT Delhi, the competent authority has determined that renewing the joint venture agreement with Apollo Hospitals Enterprise Limited or the lease deed with Indraprastha Medical Corporation Ltd would be contrary to public interest and contractual discipline. The affidavit was submitted on January 27, with counsel for the Delhi government Swati Ghildiyal confirming the details.
The government has been advised to float a Request for Proposal for long-term leasing of the land, building, and equipment on an 'as is where is' basis, with a first right of refusal to IMCL. This recommendation effectively means the government will undertake an auction process that could result in different management taking over the hospital's operations.
Historical Context of the Legal Battle
The litigation dates back to 1997 when the All India Lawyers' Union (Delhi) filed a petition in the Delhi High Court seeking enforcement of free medical treatment provisions as per the 1994 lease agreement between the Delhi government and IMCL. The original agreement stipulated that 40% of OPD patients and 33% of IPD patients should receive free treatment under the EWS category.
However, investigations have revealed stark discrepancies between the contractual requirements and actual implementation. An expert committee constituted on Supreme Court orders found that only about 9-10% of OPD patients and 7-9% of IPD patients were receiving free treatment at the hospital.
Contractual Timeline and Government Investment
The government has informed the court that the lease with IMCL expired on July 31, 2023, while the joint venture agreement with Apollo Hospitals Enterprise Limited expired much earlier on March 10, 2018. The original arrangement dates back to July 1993 when the government leased 15 acres of land in Jasola village on Mathura Road to IMCL at the nominal rate of Re 1 per month.
In addition to the concessional land, the government provided substantial financial support including:
- Rs 16 crore for hospital construction
- Rs 23.38 crore for acquisition of 26% equity shareholding in IMCL
This significant public investment was made with the explicit understanding that the hospital would fulfill its social obligations toward economically disadvantaged patients.
Supreme Court's Stern Warning and Next Steps
The Delhi government's submission comes nearly ten months after the Supreme Court issued a stern warning to the hospital. In March 2025, a bench comprising Justice Surya Kant (now Chief Justice of India) and Justice N Kotiswar Singh explicitly stated that if poor people continued to be denied free treatment, the court would hand over the hospital's operations to the All India Institute of Medical Sciences (AIIMS).
The competent authority has directed the Delhi government to initiate the auction process by engaging a transaction advisor, preferably from the government sector, with the entire process to be completed within a maximum period of two months. During this transition period, Apollo will continue to run the hospital to ensure no inconvenience to the public.
The matter, officially listed as Indraprastha Medical Corporation Ltd vs All India Lawyers' Union (Delhi Unit), was scheduled for hearing on January 28 but was not taken up. The court is expected to hear the case next on March 19. Counsel for Apollo Hospital Lalit Bhasin has declined to comment, citing the sub judice nature of the proceedings.
