The final outcome, experts said, will depend on the reimbursement model for these labs and the next steps that the Union government would take.
The court’s order, passed on Wednesday, said the government has to issue necessary directions for free testing immediately. The government has capped the cost of each test at ₹4,500.
Private labs are now likely to move the court against the interim order.
A lot is at stake. There are more than 5,500 active cases of the disease in India, and criticism has mounted over the lack of adequate testing.
Legal experts say it is for the government to now decide what is in public interest, while striking a balance between making covid-19 tests economically viable and keeping the private sector engaged.
“Though the order is laudable in view of the public interest involved, practically, this may discourage private labs from undertaking large-scale testing as they may be unable to or it may be commercially unviable for them—unless the government agrees to reimburse at least the costs," said Rajat Prakash, managing partner at Athena Legal.
Biocon executive chairperson Kiran Majumdar-Shaw put up a post on Twitter saying the top court’s order is not practical and may hinder the fight against the disease, eventually leading to a drop in testing numbers. A section of legal experts echoes her views arguing it is not up to the judiciary to decide how private and public money ought to be spent.
“The court’s order reads more like a firman of a populist politician, who is ignorant of India’s constitutional scheme, than a judicial order by the Supreme Court. It is an embarrassing example of judicial overreach. Unelected judges do not get to decide how public or private money is spent. We elect our politicians to do that job," said Prashant Reddy, a Bengaluru-based lawyer. “The government has powers under the Essential Commodities Act to regulate prices of testing by private labs and it is better placed to decide such issues that have implications for the public exchequer. The Supreme Court does not have the power, or the capability, to make similar decisions."
Solicitor general Tushar Mehta had told the Supreme Court that 15,000 tests are being done by 118 government labs every day, which is not sufficient.
The government has involved 67 private laboratories to ramp up testing. The court order said the question whether private laboratories conducting such tests are entitled for any reimbursement shall be considered later on.
Arjun Garg, partner at GSL Chambers, said that while the issue of reimbursement is open, the need of the hour is to allow as many tests as possible.
“The current order is just an interim order and thus cannot be termed as a precedent. courts will certainly pave a way for the future if the need so arises, as the writ petition is still pending. For the present, however, this is an extraordinary order to tackle extraordinary circumstances," he said.
A 7 March Indian Council of Medical Research advisory setting the price of a test at ₹4,500 is for approved private labs only.
Other recent court orders with a bearing on the private sector include fixing a deadline for the sale of vehicles compliant with Bharat Stage-IV emission norms and directing telecom operators to pay their adjusted gross revenue dues to the telecom department.
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