Directs 6% interest on delayed payments; says RT-PCR dues not linked to COVID-19 probe
Bengaluru:
The Karnataka High Court has directed the State government and Bruhat Bengaluru Mahanagara Palike (BBMP) to pay ₹10.41 crore in pending dues to two private healthcare institutions—BGS Global Institute of Medical Sciences and Vijayalakshmi Diagnostics Pvt. Ltd. (VDPL)—for RT-PCR testing services rendered during the COVID-19 pandemic between 2020 and 2022.
Justice S.R. Krishna Kumar, hearing the petitions, also ordered that the payments be made with 6% annual interest from the respective due dates until the actual date of settlement.
Breakdown of Payments Ordered
- Vijayalakshmi Diagnostics Pvt. Ltd. (VDPL):
₹5,88,91,359 with 6% interest from November 11, 2022 - BGS Global Institute of Medical Sciences:
₹4,53,50,711 with 6% interest from October 17, 2022
The court directed that the amounts be released within six weeks.
Services Rendered, Dues Acknowledged but Delayed
The petitioners told the court that they had provided round-the-clock RT-PCR testing services during the peak of the pandemic and incurred significant costs in terms of procurement of kits, chemicals, and deployment of human resources. While BBMP had admitted the pending dues, they cited an ongoing One-Man Commission inquiry into COVID-19-related irregularities as the reason for withholding payments.
High Court: No Nexus Between Dues and Probe
The BBMP submitted that it had sought the commission’s approval to release around ₹44 crore to various establishments, including the petitioners, but the commission declined the request citing the ongoing investigation.
However, the court made a clear distinction, stating:
“It is clear that in the light of the undisputed/admitted fact that the BBMP had not paid the legitimate dues payable to the petitioners… it cannot be said that the BBMP was not liable to pay/clear the legitimate dues payable to the petitioners.”
The court further clarified that the RT-PCR testing bills were not part of the commission’s scrutiny, thereby removing any legal hindrance to their release.
Background: COVID-19 Overcharging Allegations Under Probe
This court ruling comes in the backdrop of a larger inquiry into irregularities and overcharging by private hospitals and diagnostic labs during the COVID-19 pandemic. The Karnataka government had set up a commission to probe such matters after several complaints of inflated bills and misuse of public funds surfaced between 2020 and 2023.
Implications and Next Steps
With the High Court directing BBMP to clear the payments within six weeks, the ruling is expected to bring relief not only to the petitioners but also to other private service providers awaiting payment for pandemic-related services.
