Kerala High Court Upholds Law Mandating Display Of Rates Outside Hospitals; Rejects Challenge Of IMA, Pvt Hospital Bodies

The Kerala High Court on Monday (June 23) dismissed a plea challenging various provisions of the Kerala Clinical Establishments (Registration and Regulation) Act, 2018 and the Rules therein, including an objection to the provision which mandates display of fees charged by every clinical establishment for its services.Notably Section 39 (Display of the certificate of registration and other information by the clinical establishment) states, "Every clinical establishment shall display, in a conspicuous place in the clinical establishment in Malayalam as well as in English the fee rate and package rate charged for each type of service provided and facilities available, for the information of the patients". It further states that all clinical establishments in the State shall display package rates for specific procedures and such establishment shall not charge fees or package rates more than what is displayed. The petition challenging the provisions of the Act was filed by many bodies, including the Indian Medical Association, Kerala Private Hospitals Association, Medical Laboratory Owners Association, Kerala Private Clinics Association, and Indian Dental Association.One of the main objections raised was against Section 39 of the Act, which mandates that every clinical establishment shall display the fee rate and package rate of all the services provided there. The clinics are prohibited from charging more than the displayed rates. The petitioners argued that “fee rate” and package rate” have not been defined, and this might lead to a situation where authorities are empowered to proceed against any clinic arbitrarily.Justice Harisankar V. Menon in his order observed that the High Court had already in an earlier case–Sabu P. Joseph (Adv). V State of Kerala and Others (2021) issued directions to private hospital in the State to display rates and fees of the service given to the public as per Section 39 of the Act. The Court held that the petitioner cannot raise a challenge against Section 39 since the matter has already been decided by the Division Bench in Sabu Joseph. It said,"In the light of the afore, the petitioners are not entitled to raise any challenge with reference to Section 39, as noticed above. This is all the more so, since the petitioner in W.P(C)No.1365 of 2019 (Kerala Private Hospitals Association) and the petitioner in W.P(C) No.29353 of 2019 (Indian Medical Association) were the additional 5th and the 9th respondents respectively before the Division Bench of this Court and it is after hearing them also, that the Division Bench issued the directions as above". Authorities Have Power To Cancel Registration Of A ClinicThe petitioners had challenged the authorities' power under Section 25 of the Act to cancel the registration of a clinical establishment. The Court however rejected the argument of the petitioners that the authorities are given unguided power under the provision to cancel the registration of an establishment. The Authority, as defined under the Act, is the District Registering Authority. As per the provision, the authorities can issue a show cause notice to the establishments only once it is satisfied that the conditions of the registration are not complied with or that the clinical establishment has knowingly or negligently carried out an act that is harmful to the health of anyone who sought service of the clinic. The cancellation can be ordered only after giving the establishment an opportunity to be heard. The establishment has the option to file an appeal before the Appellate Body and file a revision before the High Court challenging the order of cancellation. The order of cancellation would come into effect only after lapse of the period prescribed to prefer the appeal or on the date of order of dismissal of the appeal. The authority is empowered to restrain the establishment from functioning soon after passing the order of cancellation if it is of the opinion that there is imminent danger to the health and safety of the patients. In such a case of immediate restraint, the authority should record its reasons in writing.The Court on examining the Section opined that utmost care has been taken while conferring the power on the Authority to cancel the registration, and it cannot be said that unguided powers have been given to the authority."This Court further notices that under Chapter VII, an Appellate Authority under Section 34 and a revision to this Court under Section 35 have also been provided. Therefore, I am of the opinion that there is no uncanalised power bestowed on the Authority with respect to the cancellation of registration...This Court also notices that it is not the mere ipse dixit, without any supporting reason, that attracts the rigours of Section 25. The provision makes this clear by the usage of the expression “satisfied”. Therefore, “satisfaction” of the Authority is a condition precedent for cancellation under Section 25. It is not as if the Authority can...

Kerala High Court Upholds Law Mandating Display Of Rates Outside Hospitals; Rejects Challenge Of IMA, Pvt Hospital Bodies

Manju Elsa Isac

The Court however allowed the hospital managements to approach the Government to point out practical difficulties.

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