Date of decision: March 3,  2004.


 Empanelment of Nursing Home


Dr.Ajit Gupta            

Through:         Mr.Sandeep Sethi, advocate.                                     ........Petitioner




Union of India and Anr.        

Through: MrNeeraj Jain, advocate for respondent No.1.

Ms.Anjana Gosain,advocate for respondent No.2.                   ........Respondents




Hon'ble Mr.Justice Manmohan Sarin.


(1) Whether reporters of local paper may be allowed to see the judgment?


(2)  To be referred to the reporter or not?             YES


(3)   Whether the judgment should be reported  in the Digest ?  YES



Manmohan Sarin, J.


1.                  Petitioner, Dr.Ajit Gupta, sole proprietor of Sunil Nursing Home, has filed the present writ petition for quashing of letter dated 13.1.2004 (Anneuxre P-1). By the said letter, respondent No.2-Airport Authority of India (in short "Authority") notified the petitioner that upon considering the reply dated 30.12.2003, to the show cause notice, it has been decided that the facility of credit letter, being given by various units/divisions of respondent No.2 at Delhi to the Nursing Home, would stand withdrawn with immediate effect. The Nursing Home of the petitioner had been empanelled by respondent No.2-Authority for indoor treatment of its employees.  It was one of the 61 hospitals and Nursing Homes, covered by the scheme of empanelment.


2.                  Petitioner earlier had filed CW.NO.5048/2003, titled Dr.Ajit Gupta Vs.Union of India & Anr., for quashing of Memorandum No.D-AA/NAD/ADMN/GS-III/02 dated 4.7.2003, by which various units and divisions of Authority were notified that the credit facility extended to the petitioner was withdrawn with immediate effect and no credit letter is to be given to employees for taking indoor treatment at the said Nursing Home. Petitioner had assailed the said decision as having been taken behind his back without affording an opportunity to show cause notice against the proposed action. The said writ petition was disposed of by my learned Predecessor, vide order dated 17.12.2003, directing the respondent to issue a show cause notice within a week. Petitioner was directed to file a reply thereto within a week and respondent was required to take a decision thereon in accordance with law within two weeks. In the event, show cause notice dated 23.12.2003, was duly issued by respondent No.2. Petitioner gave the reply dated 30.12.2003. Respondent No.2 vide the impugned communication dated 13.1.2004 (Annexure P-1), notified the petitioner that after considering the reply, it has been decided by the Competent Authority that the facility of credit letter being given by various units of respondent-Authority to M/s Sunil Hospital & Nursing Home, stands withdrawn with immediate effect.


3.                  Before going to the grounds on which the petitioner assails the impugned order, it would be appropriate to briefly notice the case of the respondent, as set out in the show cause notice dated 23,12,2003 and the petitioner's case, as set out in reply dated 30.12.2003.


4.                  Respondent-Authority's case is that during the currency of empanelment, cases of over charging/inflated bills and other unfair practices had been observed by it on the part of the petitioner. These are reproduced as under, for facility of reference:-


a) The medical claims of the staff (posted at IGIA) and their family members were examined for a period between June-August 2002 and it was observed that almost all the bills were inflated and charges were made in excess. After deducting the inadmissible amount to the tune of Rs.32,758/-, the balance was paid to the hospital. The details of persons and amount deducted from the bills are given in Annexure-1.


(b) The medical records of employees (post at IGIA) and their family members, who took medical treatment from M/s.Sunil Nursing Home during June-August, 2002 were scrutinized and it was found that patients had been admitted with minor ailments which necessarily may not be requiring hospitalization. The details of patients and disease etc., are given in Annexure-2.


(c) The bills in respect of 22 employees (post at IGIA) and their family members listed in Annexure-2 have also been examined and it was found that bills are inflated and/or excess charged and the amount had been deducted from almost every bill. The details of which are given in Annexure-3.


(d) It is seen from the name and designation of the patients that almost all of them are belonging to Class-IV (Group 'D') employees like Safaiwala, Belder etc., who are generally not much educated. The hospital took advantage of their lower educational level of the employees and had admitted them even for minor ailments and also raised the inflated bills which resulted in deduction as brought out in the foregoing paras.


(e) It is also clear from Annexure-1 & 3 that approx.10-12% billing amounts are either inflated and/or charged in excess which clearly establishes that M/s.Sunil Nursing Home had been indulging in unfair practices.



5.                  Petitioner in its reply denied that there was any excess or inadmissible billing. Petitioner's billing was claimed to be the lowest. Petitioner also alleged that South Point Hospital, Indian Spinal Injury, Orthonova Hospital, black listed previously for massive medical scandal have been re-empanelled. Petitioner explains that earlier charges for Nursing Care and Resident Medical Officer were not being claimed. These were sought to be charged at 20 per cent of the total bill, only in 2002, after setting up of ICU. The charges for ICU, Nursing Care and Resident Medical Officer fees, which were being paid to others, were billed by petitioner.


6.                  Coming to the question of admitting patients for minor ailments, petitioner claimed that there was no guide-line or definition of "serious disease ".  A patient could be suffering from a simple abdomen pain and fever, yet the same may be unbearable and serious. Petitioner also furnished particulars and diagnosis in respect of 15 out of 23 cases that were cited by the respondent. Petitioner claimed that if 30 to 40 employees of the respondent-Authority had been admitted as indoor patients, it had also treated 200 outdoor patients and not admitted them. The diagnosis and the treatment was sought to be justified. It was urged that, in any case, respondent had not suffered any loss, as they had made deductions, wherever, they considered the billing inadmissible. It was claimed that no complaint had been received against the Hospital and most of the patients were happy with the treatment given. Petitioner undertook to charge in future at the rates, which were mutually agreed. Petitioner claimed that the problem only arose when they started  charging Nursing Care, ICU charges, which were being paid to others.


7.                  I have heard learned counsel for the petitioner, Mr.Sandeep Sethi, in challenge to the impugned order and Ms.Anjana Gosain, counsel for the respondent-Authority in defence of the impugned order.


8.                  Mr.Sandeep Sethi, firstly submitted that the impugned order suffers from lack of reasons and thereby stood vitiated. It simply communicated a decision. Respondent-Authority was required to pass an order in accordance with law, specially, when the order visits the petitioner with civil consequences, it must be a reasoned order. The impugned order should speak for itself. Learned counsel submitted that the impugned order, being a non-speaking one, was bound to be struck down.  The absence of reasons precluded judicial review.


9.                  Learned counsel relied on the following judicial pronouncements in support of the proposition that administrative authority was required to support its decision by reasons:-


i) Mekaster Trading Corporation Vs. Union of India and others reported at 106 (2003) Delhi Law Times 573.   In the above case a  learned Single Judge of this Court, relying on the decision in S.N.Mukherjee Vs.Union of India  reported at (1990) 4 Supreme Court Cases 594, as also on M/s.Erusian Equipment and Chemicals Ltd. Vs.State of West Bengal and Another reported at AIR 1975 Supreme Court 266 and M/s.Star Enterprises and other Vs.City and Industrial Development Corporation of Maharashtra Ltd. and Ors. reported at (1990) 3 Supreme Court Cases 280, upheld the requirement of giving of reasons. He listed the following justification for the need to give reasons for administrative decisions:-

(A) It would guarantee consideration by the authority;


(B) It would introduce clarity in the decisions;


(C) It would minimise chances of arbitrariness in decision making indicating that the authority has given due consideration to the points in controversy;


(D) A duty to give reasons entails a duty to rationalise the decision. Reasons, therefore, help to structure the exercise of discretion, and the necessity of explaining why a decision is reached;


(E) Furnishing reasons satisfies an important desire on the part of the individual to know why a decision was reached (Lawrence Baxter, Administrative Law (1991 p.228);


(F) Basic fairness requires that those in authority over others should tell them why they are subject to some liability or have been refused some benefit (De.Smith, Woold and Jowell, Judicial Review of Adminstrative Actions (1995 p.459);


(G) Rationale criticism of a decision may only be made when the reasons for it are known. This subjects the administration to public scrutiny and it also provides an important basis for appeal or review;


(H) If reasons are assigned, they can provide guidance to others on the administrator's likely future decisions, and so deter applications which would be unsuccessful.  


(I) It may also protect the body from unjustified challenges, because those adversely affected are more likely to accept a decision if they know why it has been taken.


Learned Judge also held that while the administrative authority was not required to write an order in the manner in which the judgment is written by the Court of law, the reasons given by the authority need to be no more than a concise statement of the way in which it arrives at the decision.


10.               Reliance has also been placed on Liberty Oil Mills and others Vs.Union of India  reported at (1984) 3 Supreme Court Cases 465, Cycle Equipments (P) Ltd. Vs.Municipal Corporation of Delhi and others  reported at 21 (1982) Delhi Law Times, wherein it was held that mere statement of reasons in the show cause notice was not sufficient. In the cited case, it had been recorded, "Your  licence has been revoked for violation of terms and conditions of licence".  The Court held the same to be inadequate and insufficient. It held that where the statute required a duty to give reasons, the Court should imply a condition that reasons given in discharge of their duty should be adequate and intelligible. It should not be merely a statement of the conclusion arrived at by the concerned party. In the cited case, a brief statement of the reasons clearly implies that the concerned authority must, at least, indicate how the grantee of a licence has infringed or evaded any of the restrictions or conditions of a licence.


11.               Relying on the aforesaid decisions, Mr.Sethi submitted that the impugned order was not sustainable, as it failed to give any reason whatsoever.  On merits, Mr.Sethi submitted that petitioner's rates were admittedly cheaper than other hospitals, who were having similar credit facility. The charges of ICU of Rs.1600 per day and Rs.150 for Nursing Care and Rs.250 as the Resident Medical Officer Fee, were in accordance with the norm that these charges should not exceed 20 per cent of the total charges. As the respondent had objected, petitioner did not press for these charges, which, in petitioner's case, amounted to 10 to 12 per cent of the billing. As regards the allegation of admitting patients, who did not require hospitalisation, Mr.Sethi submitted that it was entirely the prerogative of the doctor attending,  who had the responsibility to diagnose the patient's ailments, carry out the investigation and give the required treatment. Petitioner was obliged to treat and give what was considered as the appropriate treatment and could not take any chance with the health of the patients.


12.               Learned counsel also submitted that withdrawal of the credit facility virtually amounts to withdrawal of all patients, as no patient would like to pay the charges first from his own pocket while receiving treatment and then claim reimbursement from respondent No.2. The action of the respondent was assailed as discriminatory, as other hospitals, levying higher charges and despite there being allegation of excessive billing, continued to enjoy the credit facility. Mr.Sethi submitted that it was only respondent, who had raised the issue of excessive billing or hospitalization of patients when the same was not required. No complaint has been received from any of the patients. The discretion of the doctor in taking a decision with regard to the nature and extent of treatment prescribed is not to be questioned. Mr.Sethi also assailed the passing of the impugned order without granting an opportunity  of personal hearing, as being violative of principles of natural justice. He submits that non-giving of opportunity of personal hearing was indicative of the pre-determination of the respondent to deny the credit facility in a discriminatory manner to the petitioner. Accordingly, it was urged that the impugned order should be set aside and credit facility restored to the petitioner.


13.               Ms.Anjana Gosain on behalf of the respondent submitted that although petitioner deserves to be depanelled, respondent, in view of the directions given in the earlier writ petition No.5048/2003 had confined themselves to the issue of withdrawal of credit facility, which was in issue in the said writ petition.  She contended that the respondent had duly complied with the letter and spirit of the order passed in CW.No.5048/2003, by issuance of show cause notice, listing out various grounds and furnishing the details of the inflated bills and the admission of 23 cases, out of which many did not require hospitalization. Petitioner had failed to furnish any justification for 8 cases out of 23 and had given its version only in respect to 15. Learned counsel submitted that it was also significant that most of 23 patients admitted belonged to Group C and D category of employees being Safai Karamchari and others, who were hardly educated and not in a position to understand the nature of their ailment or were acting in connivance with the hospital for being admitted and inflated bills being raised firstly for services and treatment, which were not required secondly the charges being inflated. She submits that there had been excess billing and charges necessitating deduction and that out of 113 bills of various hospitals, where deductions were made for excess billing or inadmissible charges, 63 belonged to the petitioner and the total deductions of the petitioner amounted to Rs.2,15,000/-. She submitted that the respondent had conducted an inhouse impartial assessment by the Vigilance Officer, who had referred the various cases for medical opinion to Dr.Agnihotri, who after reviewing the case sheet and the medical record opined that petitioner had been indulging in unfair practice of unnecessarily admitting large number of Group C and Group D employees even for minor ailments like pain in abdomen, fever, chest pain and raising inflated bills for monetary gains, which indicated malpractice adopted by the hospital.  He recommended that the matter ought to be examined in further detail and suitable action taken.  He also recommended that indoor medical bills of all offices of the respondent-Authority need to be scrutinised by the medical officials of the respondent, specially in respect of empanelled hospitals, Nursing Homes, where claims were on the higher side. He recommended that the credit facility being given be withdrawn with immediate effect. The doctor after examining the evidence had found that the pathology and other tests/reports, which were required to be signed by the doctor, by whom the patient was referred for test, as also by the Pathologist were not so signed.  Doctor had further given the opinion that Endoscopy done in majority of cases was not required. It also opined that outdoor treatment in 6 out of 22 cases for indoor patients would have been sufficient.


14.               As regards the non communication of reasons, respondent has produced the entire record including the vigilance report as also the opinion given by the in-house doctor.  Record relating to the issuance of show-cause notice and consideration of the reply has also been produced.  While taking an administrative decision it is desirable if the reasons are communicated.  In case the reasons are not communicated but are available on record, during judicial review the same can be considered.  Reference in this connection is invited to the observations made by Supreme Court in the case of M.J. Sivani    Vs. State of Karnataka reported at 1995 (6) Supreme Court Cases 289.  While noting that an order need not contain detailed reasons like a Court order, the Court noted:


"Administrative Order itself  may contain reasons or the file may disclose reasons to arrive at the decision showing application of mind to the facts in issue.  It would be discernible from the reasons stated in the order or the contemporaneous record. ............"


Reference may also be usefully made to the decision of Supreme Court in the case of Maharashtra State Board of Secondary and Higher Secondary Education Vs.  K.S.Gandhi reported at (1991) 2 SCC 716.  The Court held:


"When  an order affects the right of a citizen or a person, irrespective of the fact whether it is a quasi-judicial or administrative order, and unless the rule expressly or by necessary implication excludes recording of reasons, it is implicit that principles of  natural justice or fair play require recording of germane and precise relevant reasons as a part of fair procedure.  In an administrative decision its order/ decision itself may not contain reasons.  It may not be the requirement of the rules, but at the least, the record should disclose reasons.  It may not be like a judgment.  The extent and nature of the reasons would depend on particular facts and circumstances."


Applying the above judicial principles enunciated in the cases of M.J.Sivani Vs. State of Karnataka (Supra) and Maharashtra State Board of Secondary and Higher Secondary Education Vs. K.S.Gandhi (Supra), it would be seen that even if the communication did not disclose the reasons, the reasons exist on the record in the processing of the show cause notice and consideration of the reply thereto as also the material and basis for the same is found in the vigilance report and the report of the in-house medical doctor.


15.               I have perused the vigilance report, as also the medical opinion given by the doctor. The analysis submitted by the General Manager (Administration) on the reply given to the show cause notice has also been perused. A perusal of the Vigilance report as also the opinion of the Inhouse  doctor shows objective consideration of the entire matter. The Authorities have also noted that complaints being made by the petitioner or raising allegation against other hospitals does not justify the omission and excessive charges by the petitioner. It was also noted that there was no explanation tendered with regard to the 8 cases out of 23, which had been admitted. The note records reasons why the reply is found to be unsatisfactory. It further records that it was a fit case for depanelment. However, as the matter before the Court was for withdrawal of credit facility, the present action was confined to withdrawal of credit facility.


16.       On perusal of the record, as noted above, I am of the view that

material exists on record, including the vigilance report and the opinion of the Inhouse doctor and the analysis done by the respondent of the reply to the show cause notice to reach the decision regarding withdrawal of credit facility to the petitioner. This shows objective consideration of the material on record. Petitioner has been given the opportunity to show cause against the proposed action. Petitioner has duly availed of the same. Not only this, the material on which reliance was sought to be placed and details of the excessive billing etc., and of patients, which were claimed to have been unnecessary hospitalized, were furnished. The requirements of natural justice have been duly met. I do not find that the decision making process is flawed in any manner.


17.               While it is true that the respondent-Authority did not give any reason in the communication sent to the petitioner, cogent reasons exist on record and applying the ratio of M.J.Sivani Vs. State of Karnataka (Supra) and Maharashtra State Board of Secondary and Higher Secondary Education Vs.K.S.Gandhi (Supra), the reasons were available on record, which have been perused.


18.               There is yet another aspect, which may be noticed. A high level of confidence is required to be maintained between the doctor and the patients. The doctor, Nursing Home and Hospital, who are providing professional services to the patients are placed in a position, where the patients completely rely and depend on them for the treatment and their well-being. The medical doctor has an unfettered discretion to determine the extent and mode of treatment. It is of critical importance that in such a relationship, parties have total confidence in each other and services are rendered observing high professional norms and ethics unaffected by avarice.


19.               In case, there are facts and circumstances, which even raise a doubt or suspicion that the services being provided are vitiated  for extraneous factors or credit facility is being misused, then it completely shatters the high level of confidence i.e., essential between the employer and the service provider. In the instant case, to take one ground, respondent has reasons to believe or suspect that hospitalization was resorted to when the same was not warranted and could have been treated clinically or in O.P.D., i.e., Out Patient Department. Such cases being found, especially in cases of lower strata employees, respondent-Authority was fully justified in taking a decision, based on the material available on record that it would not extend credit facility to the petitioner. As of now, petitioner has not been de-panelled. An employee/patient is still free to go to the petitioner and receive treatment. However, the employee concerned would have to make payment and submit his claim for reimbursement. This could be a safeguard against any exploitation. I find that the view taken by the respondent-Authority on the basis of material available on record, is a reasonable view.




20.               The decision making process has not been vitiated by violation of principles of natural justice or malafides. The matter has been considered in an objective manner. The view taken by the respondent-Authority cannot be termed as a view, which is not plausible or reasonable.


The writ petition has no merit and is dismissed.



March  3, 2004                         Manmohan Sarin,J