No Relief for Private Labs: Kerala HC upholds Single bench order, refuses to stay Govt Decision reducing RT-PCR test rates

The High Court bench took of the facts that the revised rates of Rs 500 for RT-PCR tests are within the same range of many other states like Haryana, Telangana, and Uttarakhand etc., and the State had re-fixed the rates after taking into consideration various aspects including the inputs given by Kerala Medical Services Corporation Ltd. (KMSCL).

Further observing that majority of the accredited laboratories in State of Kerala including a diagnostic centre, which has branches throughout the State have accepted the revised rates of RT-PCR tests, the division bench comprising of Justices Anil K. Narendran and Ziyad Rahman A. A held that, "we find no reason to interfere with the reasoning of the learned Single Judge in the impugned order dated 07.05.2021, declining the interim reliefs sought for in W.P.(C)No.10997 of 2021, in exercise of the appellate jurisdiction under Section 5 of the Kerala High Court Act, 1958."

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The petitioner private laboratories had approached the division bench of the High Court after the single judge dismissed their appeal seeking to quash the Government orders refixing the rate of RT-PCR tests chargeable by the private laboratories in Kerala. The petition had further sought to for a writ of mandamus commanding the State to issue necessary guidelines/ directions/orders to defray the expenses and reimbursement to the private laboratories the loss suffered by them.

The petitioner laboratories had contended that the State had no authority or jurisdiction to fix the rates for RT-PCR test with respect to private laboratories, otherwise than in accordance with law, unless and until they are ready to subsidise the lesser amount than that prescribed by the Indian Council for Medical Research (ICMR) for COVID-19 tests.

Further, the petitioners had sought for an interim stay of operation and implementation of the order dated 30.04.2021 and 01.05.2021 of the State and all further proceedings pursuant thereto, pending disposal of the writ petition.

However, the Single Judge of the High Court had earlier taken note of the fact that the Government had ordered the rate of RT-PCR test after conducting a market survey and market study through the KMSCL. In fact, from the submissions, the Court had observed that cost of PCR test including swab collection would come to Rs.135/- to Rs.240/- only. Besides, considering the situation where the charges in many of the other States in the Country like Haryana, Telangana and Utharakhand are within the same range, the Single Judge bench had denied passing any interim order in this matter.

When the petitioners approached the division bench of the High Court, the counsel appearing for the petitioners contended that the State Government's order for refixing the rate for RT-PCR test for COVID-19 was in violation of the principles of natural justice. He also stressed upon the fact that ICMR was the competent authority for fixing rate for RT-PCR test and the State had no authority in this regard at all.

Further submitting that KMSCL was procuring RT-PCR test kits in large volume, the counsel for the petitioners contended that the competitive price offered by KSMCL by various companies couldn't be the basis for fixation of rate for RT-PCR test by private laboratories.

The counsel for the state, on the other hand, relied on the Supreme Court judgment in Welcom Hotel v. State of Andhra Pradesh, Union of India v. Cynamide India Limited and Sai Bhaskar Iron Limited v. A.P. Electricity Regulatory Commission and contended that the fixation/revision of the rate for RT-PCR test for COVID-19 by the State was a legislative function and as such the principles of natural justice have no application.

He also pointed out towards several provisions under the Epidemic Diseases Act, 1897 and submitted before the Court that the State refixed the rate for RT-PCR test, only taking into consideration various aspects including the inputs given by KMSCL, further adding that various other States had also fixed and revised the rates of RT-PCR tests for Covid-19.

After listening to the contentions of both the parties, the High Court division bench noted that the decision by the State was taken after it noticed that "there is massive price reduction in the market for test kits and consumables due to multiple competent players with ICMR approval, which is equally applicable for the private sector."

"The unit rate specifically mentioned by the private laboratories, during the personal hearing, regarding Automated RNA extraction kits are for the most expensive kits available in the market, and henceforth a general approach based on those rates cannot be accepted," observed the Court.

Further, the division bench also took the submission made by the State into consideration that there were complaints that the rate for RT-PCR test in the State of Kerala is the highest in the Country. The bench also observed that as per various articles published in the media, several other States had fixed the rates of RT-PCR tests at Rs 500 and in fact, in some of the States, the cost was lesser than Rs 500.

It was also noted by the Court that a Division bench of the Kerala High Court, while considering a Public Interest Litigation seeking a direction to reduce RT-PCR rates in the State of Kerala, had orally appreciated the stand of the State in reducing the RT-PCR rate.

Moreover, the fact that majority of the accredited laboratories in State of Kerala including a diagnostic centre having branched throughout the State had accepted the new rates was taken into account by the division bench. In fact, only 10 laboratories had approached the court objecting against the new rates, observed the Kerala High Court bench.

While considering the issue of authority, the High Court observed that in a letter from Department of Health- and Family Welfare, Ministry of Health, Department of Health Research and ICMR, the State Governments are asked to finalise the rates for RT-PCR test by the private laboratories.

Therefore, the division bench dismissed the plea observing, "we find no reason to interfere with the reasoning of the learned Single Judge in the impugned order dated 07.05.2021, declining the interim reliefs sought for in W.P.(C)No.10997 of 2021, in exercise of the appellate jurisdiction under Section 5 of the Kerala High Court Act, 1958."

To view the original court order, click on the link below.