Have taken oath, not bothered about consequences: Madras HC quashes license cancellation of Cethar Hospital

Madurai: Setting aside the Tamil Nadu government’s order cancelling the organ transplant licence of Cethar Hospital in Tiruchirappalli over its alleged involvement in a kidney transplant racket, the Madurai Bench of the Madras High Court observed that the authorities had violated legal procedures and principles of natural justice, and accordingly quashed the government’s order.

Medical Dialogues had earlier reported that a suspected kidney transplant racket came to light in Namakkal, where a broker allegedly targeted poor textile workers, lured them into selling their kidneys for money at two private hospitals - Dhanalakshmi Srinivasan Medical College Hospital in Perambalur and Cethar Hospitals in Trichy.

The donors were secretly taken to private hospitals, admitted as patients, and kept for a week to undergo the transplant in exchange for amounts ranging from Rs 5 to 10 lakh. After the procedure, they were handed over the money, which helped them to repay their debts. The brokers specifically targeted vulnerable and poor individuals who were in urgent need of money. Investigators suspected that the middlemen supplied poor donors to recipients under the guise of false familial relationships.

Also read- Unacceptable, Disappointing: Madras HC orders SIT probe in kidney transplant racket

Following this, the Directorate of Medical and Rural Health Services permanently revoked both the hospital's transplant licences. Both private hospitals were found submitting forged documents to government accreditation committees to obtain transplant approvals, in violation of the Transplantation of Human Organs Act, 1994.

The court was hearing the petition filed by Cethar Hospital against the cancellation of the license to conduct liver and kidney transplantations.

During the hearing, Single Bench Justice G.R. Swaminathan noted that the Health Department had cancelled the hospital’s liver and kidney transplant licence without following the process laid down under the Transplantation of Human Organs and Tissues Act, 1994. The court noted that no show-cause notice was issued, and the hospital was not given a chance to be heard before the cancellation.

The counsel appearing for the hospital argued that the authorities failed to follow Section 16 of the Act, which required issuing a show-cause notice and providing an opportunity to be heard.

In response, the state, however, argued that the petition was not maintainable since the hospital had already filed an appeal before the Government under Section 17 of the Act and should not be permitted to pursue two parallel remedies in respect of the same matter at the same time.

When the Additional Advocate General expressed concern that the public might react negatively to restoring the hospital’s licence, the bench replied,

"I feel compelled to make a remark or two regarding the backlash which the learned Additional Advocate General foresees. Judges have to remain insulated to such probabilities. They have taken oath to uphold the law. They cannot be bothered about the consequences. They cannot worry what the people will think. They are answerable to only to their conscience."

The court explained that suspension of a licence can happen in two situations, as a punishment or during the pendency of cancellation proceedings. The court added that while notice was compulsory in the former, it was not mandatory in the latter.

It noted that when the authority intended to cancel the registration and was of the opinion that no operations should be carried out in the meantime, it could order suspension. However, in such cases, the reasons must be recorded in writing and issuance of notice can be suspended only by recording of reasons contemplated under the proviso to Section 16(2) of the Act. The court also noted that the appropriate authority could cancel the registration only after giving a reasonable opportunity to the hospital to be heard.

The judge emphasised that “when law prescribes adopting a particular and specified procedure, it must be followed.” He further remarked that the authority’s action amounted to “a case of rank illegality” since it failed to follow the procedure under Section 16 of the Act.

"Since the reputation of the hospital is involved apart from its right to carry on business, a proper enquiry must be conducted. The institution must be given full and fair opportunity to rebut the allegations made against them," observed the Bench.

While allowing the writ petition, the court also stated that "in popular perception, the hospital in question might stand condemned. But I won't crucify without following due process." Hence, the court concluded that the cancellation order was void and that the suspension order would not revive as it had merged with the cancellation order.

To view the official court order, click on the link below:

Also read- Madras HC seeks Govt order on licence cancellation in Kidney Transplant Racket Case