Hospitals must display rates: Kerala HC

Ernakulam: The Kerala High Court recently upheld the provisions of the Kerala Clinical Establishments (Registration and Regulation) Act, 2018, and the Rules, which mandate that every clinical establishment display the fees charged for its services. Further, on the matter of the power of Authorities to Cancel Registration of Clinical Establishments, the bench observed that there is no uncanalised power bestowed on the Authority with respect to the cancellation of registration

Although these provisions of the Act were challenged by doctors' associations, including the Indian Medical Association (IMA), Kerala Private Hospitals Association, Medical Laboratory Owners Association, Kerala Private Clinics Association, and Indian Dental Association. However, dismissing these pleas, the HC bench upheld these provisions.

Display of Rates outside Hospitals:

Addressing the issue of display of certificate of registration and other information by the clinical establishment, Section 39 of the Act 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 also states that all clinical establishments in Kerala shall display package rates for specific procedures and such establishment shall charge fees or package rates more than what is displayed.

One of the main objections of the petitioners was against Section 39 of the Act as they argued that the "fee rate" and "package rate" have not been defined, and this might lead to a situation where the authorities are empowered to proceed against any clinic arbitrarily.

However, the HC bench comprising Justice Harisankar V. Menon observed in the order that in an earlier case (Sabu P. Joseph (Adv). V State of Kerala and Others), the High Court had already directed private hospitals in the State to display rates and fees of the service given to the public as per Section 39 of the Act.

Accordingly, the bench held that the petitioners could not raise a challenge against Section 39 since the matter had already been decided by the Division Bench previously.

"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," observed the HC bench.

Challenge Against power of Authorities to Cancel Registration of Clinical Establishment:

Apart from this issue, the petitioners also challenged the power vested upon the authorities under Section 25 of the Act to cancel the registration of a clinical establishment. Under the Act, the District Registering Authority is defined as the authority.

The Act gives power to the authorities to issue a show-cause notice to the establishment 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 at the clinic.

Thereafter, the establishment is given an opportunity to be heard and only after this, cancellation can be ordered. Meanwhile, 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.

As per the Act, the order of the cancellation comes into effect only after a 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 opines 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.

While the petitioners challenged these provisions, the HC bench rejected the argument that the authorities are given unguided power under the provision to cancel the registration of an establishment.

After examining the Section, the Court opined that utmost care has been taken while conferring the power on the Authority to cancel the registration.

"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," opined the HC bench.

"In the light of the afore, it goes without saying that unless the cancellation is proved and supported with material facts and figures, the same is subject to judicial review. However, that cannot be a reason to contend that excessive powers are bestowed on the statutory Authority," it further held.

Challenge against Act being applicable for Dentistry also:

The Court also considered the opposition of some of the petitioners against the Act being made applicable to 'dentistry'. They argued that since dentistry did not come under the head of 'public health and sanitation' or 'hospitals and dispensaries' in the State List, the enactment was without legislative competence.

However, the HC bench observed that the State was competent to enact the said Act, and it can include dentistry within the definition of 'recognised system of medicine' as dentistry is only a specialised department of medical science.

"... it is quite clear that dentistry is part of “modern medicine”, and it is made clear through the definition of dentistry under Section 2(j) of the Act. Assuming for a moment that dentistry is not covered under the Central Act, nothing prevents the State Legislature from including “dentistry” with reference to the definition of the term “recognised system of medicine” under the State Act... Therefore, I am of the opinion that the inclusion of “dentistry” under section 2(j) of the impugned Act cannot be found fault with, as one made without legislative competence," held the HC bench.

Inclusion of Representatives from welfare organisation:

The Court also rejected the challenge against Section 3 and 8 of the Act which mandates inclusion of a representative from welfare organisation of the patients in the State. While the petitioners had challenged that such inclusion was illegal in an expert body, the Court observed that when representatives of IMA and Indian Dental Associations were included in the Council, the service recipients should also be included.

In this regard, the bench held, "This Court is not in a position to accept the afore contention insofar as the State Council and Executive Committee visualise inclusiveness by providing for representation from the side of patients also, however, to be nominated by the Government from various welfare organisations. This Court further notices that representatives from the side of some of the petitioners, like the Indian Dental Association and the Indian Medical Association, are included in the constitution of the State Council. When the State Council can include representatives from the side of the service providers, like petitioners herein, it goes without saying that service recipients should also be included in the Council/Committee. Therefore, the contention with reference to the constitution of the State Council and the Executive Committee is only to be recorded and rejected."

Several other provisions of the Act had been challenged by the petitioners alleging vagueness and the possibility of arbitrariness on account of it. However, relying on the Supreme Court judgment in the case of State of A. P, and Others v McDowell & Co. and Others, the HC bench held that a law can be struck down only on grounds of legislative competence, violation of fundamental rights or any of the constitutional provision.

"Thus, it is settled principle of law that this Court can strike down an enactment only on the grounds of lack of legislative competence, violation of fundamental rights or any of the constitutional provisions. It has been emphatically laid down by the Apex Court that “there is no third ground” for striking down a law enacted by the Legislature. As already found, there is no legislative incompetence - with respect to the provisions of Entry 6 to List II of the Seventh Schedule or the provisions of Article 252. The petitioners have not pointed out any violation of the Constitutional provisions or violation of fundamental rights in support of the above contention," observed the HC bench.

"True, the petitioners have contended that the Legislation in question provides for unbridled and arbitrary powers on the statutory authorities. In this connection, apart from the submission made to that effect, none of the petitioners has relied on any actual unreasonable actions/steps taken against them. Apart from this, as held by the Apex Court again...an enactment cannot be struck down merely on account of the alleged unreasonableness/ arbitrariness," it further noted.

The High Court bench also referred to the Supreme Court order in the case of State of Punjab v Shiv Ram and Others, which emphasized the need for external regulation in medical field. It also noted that various High Courts have dismissed challenge against similar enactments made in the respective States. Accordingly, the bench rejected the challenge against the validity of the Act. However, it left it open to the petitioners to point out the practical difficulties faced by them before the Government and held that the Government should consider those difficulties and adopt remedial measures.

To view the order, click on the link below:

https://medicaldialogues.in/pdf_upload/kerala-hc-clinical-establishment-act-292191.pdf

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