Private hospitals challenge Kerala Clinical Establishments Act: Supreme Court issues notice, grants interim relief

New Delhi: The Supreme Court has recently issued notice in a plea challenging the constitutional validity of the provisions of the Kerala Clinical Establishments (Registration and Regulation) Act, 2018, and the Rules framed under it.

Under Section 39 of the Act, every clinical establishment is mandated to display the fee rate and package rate of all services provided. Challenging this, the Kerala Private Hospitals Association approached the Apex Court, arguing that the Act does not define expressions such as "fee rate" and "package rate", making compliance arbitrary and exposing hospitals and clinics to subjective enforcement by authorities.

Apart from issuing notice in the plea, the top court bench also directed that no coercive steps be taken against the petitioners till the next date of hearing.

Medical Dialogues had previously reported that earlier this year, the Kerala High Court 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 had observed that there is no uncanalised power bestowed on the Authority with respect to the cancellation of registration

Earlier, while upholding the Act, the Kerala High Court had issued directions stating that hospitals cannot deny life-saving treatment for non-payment of advance or lack of documents. The HC bench had also issued directions to every medical establishment to file an undertaking of compliance within 90 days, followed by audits. In its order, the High Court had also clarified that non-compliance would invite regulatory action.

Also Read: Hospitals must display rates: Kerala HC

As per the latest media report by Live Law, during the hearing of the case before the Supreme Court, the counsel for the petitioners, Senior Advocate Gopal Sankaranarayanan, read out the provisions under challenge and submitted that the petitioners were not opposed to the requirement of providing emergency treatment and he further clarified that there was no objection to the mandate that life-saving care should not be denied for want of money.

However, he pointed out that the period of provisional registration had expired and the hospitals were now required to seek permanent registration under Section 19 of the Act, which necessitated compliance with all provisions. Accordingly, he urged the top court bench to continue the interim protection, granted by the High Court that restrained coercive action.

On the other hand, Advocate Siddharth Gupta, who was representing a human rights organisation, submitted that the court should not stay in the operation of the Act and argued that for nearly seven years, the petitioners had prevented the effective implementation of the law.

The Apex Court bench sought the assistance of Solicitor General Tushar Mehta in this matter. After considering the submissions made by both the parties, the bench issued notice, returnable on February 3, 2026.

It also recorded that similar interim protection had been granted by the Kerala High Court and directed that the members of the petitioners' associations shall continue the process of seeking permanent registration under Section 19 of the Act. It also ordered that no coercive measures be taken against them in the meantime.

"Considering these facts, we only provide that the Members of petitioner-Association will continue with their exercise of getting themselves registered under the Section 19 of the 2018 Act. However, the respondents shall not take any coercive measures till the next date, i.e. 03.02.2026. The interim order is limited till the next date fixed, i.e. 03.02.2026," ordered the top court bench.

Background:

Back in June, the Single judge bench of Kerala High Court had dismissed the plea filed by the medical bodies, noting that in an earlier case, Sabu P. Joseph (Adv). V State of Kerala and Others, the Division bench of the HC had already issued directions to private hospitals in the State to display rates and fees of the service given to the public as per section 39 of the Act.

Back then, upholing the Act, the Division bench of the HC had issued certain guidelines- such as hospitals can't deny life-saving aid to the patients for non-payment of advance or lack of documents. It was also made a requirement that every clinical establishment filed an undertaking of compliance with the Act within 30 days and the same had to be audited within 60 days, followed by periodically audits. It had been clarified back then that non-compliance would attract regulatory action.

The recently filed Special Leave Petition filed against the Kerala HC order has questioned the constitutional validity of key provisions including Sections 16, 39 and 47 of the Act. While Section 39 mandates that every clinical establishment publicly display the fee rate and package rate of all services provided, the petitioners argued that the Act does not define crucial expressions such as "fee rate", "package rate" or even "type of service", rendering the requirement vague, unworkable and open to arbitrary enforcement. Therefore, the plea argued that the medical treatment is inherently dynamic and varied from patient to patient, making any obligation to pre-display exhaustive price structures commercially oppressive and structurally impossible.

Further, the medical bodies have argued that the High Court could not appreciate the evidence placed on record to show that the government schemes, such as MEDISEP and CGHS, themselves contained nearly 2,000 procedures each, demonstrating the impracticality of exhaustive rate display.

According to the medical bodies, the law imposes disproportionate restrictions on the right to practise any profession under Article 19(1)(g) and exposes hospitals, especially smaller establishments, to harassment through subjective regulatory action.

They also challenged Section 47 of the Act, which makes it obligatory for all clinical establishments to provide life-saving treatment and ensure safe transportation of patients in emergencies. They submitted that the provision applies uniformly to all establishments regardless of size, infrastructure or capability, treating a tertiary referral hospital and a single-doctor clinic alike. The medical bodies argued that the High Court effectively rewrote the statute by reading a tiered framework into the law through executive notifications, instead of testing the provision on constitutional grounds.

Raising privacy concerns, the plea also objected to the requirement under the Rules, and prescribed forms to disclose granular details of doctors, nurses and other staffm including qualifications and registration numbers, to be uploaded and periodically updated on government systems. The medical bodies contended in this regard that such data collection lacked clear statutory backing, violating informational privacy recognised in the Puttaswamy judgment, and undermines competitive confidentiality in the healthcare sector.

To view the order, click on the link below:

https://medicaldialogues.in/pdf_upload/supreme-court-kerala-clinical-establishments-act-315056.pdf

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