Additional Director Under Central Govt Health Scheme Has No Authority To De-Empanel Hospital: Rajasthan High Court

Rajasthan High Court granted relief to the Medipulse Hospital (“the Hospital”) which was de-empanelled from the Central Government Health Scheme (“CGHS/Scheme”) for five years by the Government of India pursuant to a complaint against the Hospital by a retired central government employee alleging deficient services by the Hospital.

The bench of Justice Dinesh Mehta observed that there was no statutory provision or stipulation for de-empaneling a Hospital that too for five years from the CGHS that could be seen as granting power to the Additional Director, CGHS to de-empanel a hospital from the scheme.

“Adverting to the second ground, that there is no provision for de-empanellment that too for a period of five years, this Court is of the view that the petitioner has suffered this order for more than four months, without there being any serious lapse on its part. The respondent – UOI has failed to point out any statutory provision or stipulation in the agreement, which clothes the respondent no.3 with the power to de-empanel a hospital.”

The Hospital was empanelled under CGHS and an agreement was entered into between the Hospital and the Central Government in 2019 to that effect. One of the provisions under the Scheme was that the retired central government employees could apply for cashless treatment at empanelled hospitals using a CGHS card or could ask for reimbursement later.

In 2024, owing to some dispute regarding payment between the Hospital and a retired central government employee, a complaint was filed by the patient against the Hospital to the Additional Director, CGHS, alleging failure on the part of the Hospital to provide appropriate facilities.

A show cause notice was issued to the Hospital seeking its reply within 3 days, however, when no response was received, the Hospital was de-empanelled. This order was challenged by the petitioner.

The petition challenged the order of de-empanelment on two grounds, firstly, the show cause notice was never received by the Hospital, hence the order was contrary to the principles of natural justice; and secondly, there was no provision under CGHS or under the Agreement executed in 2019 providing for such de-empanelment. Hence, the order was argued to be illegal and arbitrary.

Pursuant to an interim order in the petition in which the Court had directed the respondents to serve another show cause notice to the Hospital, the same was done.

In this background, the Court rejected the first ground raised by the petitioner. However, while accepting the second ground, the Court held that since no statutory provision was put forth by the respondents that reflected the power of the Additional Director, CGHS to de-empanel the Hospital, the petition was allowed.

Accordingly, the order de-empaneling the Hospital for five years was set aside allowing the Hospital to carry on the treatment under CGHS.

Title: Medipulse Hospital v Union of India & Ors.

Citation: 2024 LiveLaw (Raj) 208

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