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2021 DIGILAW 394 (ALL)

Mukesh Tandon v. State Of U. P.

2021-03-15

RAVI NATH TILHARI, SURYA PRAKASH KESARWANI

body2021
JUDGMENT : 1. Heard Sri Anoop Trivedi, learned Senior Advocate, assisted by Sri Avneesh Tripathi, learned counsel for the petitioner, Sri Suryabhan Singh, learned Counsel for the respondent Nos. 1 and 5, Sri Arvind Kumar Goswami, learned Central Government Counsel for the respondent Nos. 2 and 4 and Sri Madhukar Ojha, learned counsel for the respondent Nos. 3, 6, and 7. Order on Impleadment Application 2. With the consent of the learned counsels for the parties, the Impleadment Application No.2 of 2021 is partly allowed and the proposed respondent Nos. 6 and 7 are allowed to be impleaded. This writ petition has been filed praying for the following relief:- 3. (I) To issue a writ, order or direction in the nature of certiorari, quashing the impugned order dated 24.12.2020 (Annexure-10 to the writ petition)passed by the respondent no.3. 4. Order on writ petition With the consent of the learned counsels for the parties, this writ petition is being finally heard without calling for a counter affidavit. 5. Facts Briefly stated facts of the present case are that according to the petitioner, he owns and runs a Hospital under the name and style of “Dayal Nursing Home, having its registered office A-1 H.I.G., Mundera, Prayagraj”. The aforesaid hospital is empanelled under the scheme of Central Government called as “Pradhan Mantri Jan Arogya Yojana (PMJAY)”. Earlier the aforesaid scheme was known as Ayushman Bharat Jan Arogya Yojana. According to the respondents, on receipt of certain information from National Anti Fraud Unit (NAFU) with respect to the working of the petitioner’s hospital, the petitioner’s hospital was put on “Watch-List” of the State Anti Fraud Unit (SAFU). Super specialist was hired by the State Health Agency (SHA) i.e. Avighna Mednet (OPC) Pvt. Ltd, which submitted its analysis report. On the basis of alleged prima facie fraudulent activity, the empanelment of the petitioner’s hospital was suspended by order dated 04.12.2020 with immediate effect, by the State Health Agency. 6. According to the respondents, after the hospital was suspended from the empanelment, certain investigations were made, the statement of the petitioner was recorded on 09.12.2020 and certain evidences were collected. The field investigation was allegedly conducted on 09.12.2020. The field investigation report and comparative analysis (Desk Audit vs Case Sheets allegedly found in the hospital at the time of Hospital Audit) was submitted on 15.12.20202. The field investigation was allegedly conducted on 09.12.2020. The field investigation report and comparative analysis (Desk Audit vs Case Sheets allegedly found in the hospital at the time of Hospital Audit) was submitted on 15.12.20202. Based on the aforesaid material, the empanelment of the petitioner’s hospital was cancelled, three times of the disputed amount was imposed as penalty and the entire amount was directed to be recovered by the impugned order dated 24.12.2020 passed by the Chief Executive Officer-SHA (Uttar Pradesh), Lucknow. Aggrieved with this aforesaid order, the petitioner has filed the present writ petition. 7. Discussion and Findings It is admitted by the learned counsels for the parties that empanelment as well as action for de-empanelment is governed by the guidelines issued by the Central Government with respect to Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (ABPMJAY). Copy of the aforesaid guidelines has been produced before us by both the learned counsels for the parties, which is kept on record. The copy of instructions as produced by learned counsel for the respondent Nos. 3, 6 and 7 is also kept on record. 8. The process for disciplinary proceeding of the de-empanelment is provided in Para 1.10 of the aforesaid guidelines. Part-A of para 1.10 of the aforesaid guidelines provides for institutional mechanism. Part-B provides for steps for disciplinary proceedings, which is relevant for the purposes of the present case and is reproduced below:- B.Steps for Disciplinary Proceedings Pradhan Mantri Rashtriya Swasthya Suraksha Mission (PMRSSM)-Guideline Step 1 - Putting the provider on “Watch-list” Based on the claims, data analysis and/or the provider visits, if there is any doubt on the performance of a Provider, the SEC on the request of the IC or the SHA or on its own findings or on the findings of the DEC, can put that hospital on the watch list. The data of such hospital shall be analyzed very closely on a daily basis by the SHA/SEC for patterns, trends and anomalies and flagged events/patterns will be brought to the scrutiny of the DEC and the SEC as the case may be. The IC shall notify such service provider that it has been put on the watch-list and the reasons for the same. The IC shall notify such service provider that it has been put on the watch-list and the reasons for the same. Step 2 - Issuing show-cause notice to the hospital Based on the activities of the hospital if the insurer/trust believes that there are clear grounds of hospital indulging in wrong practices, a show cause notice shall be issued to the hospital. Hospital will need to respond to the notice within 7 days of receiving it. Step 3 - Suspension of the hospital A Provider can be temporarily suspended in the following cases: (i) For the Providers which are on the “Watch-list” or have been issued show cause notice if the SEC observes continuous patterns or strong evidence of irregularity based on either claims data or field visit of the hospital or in case of unsatisfactory reply of the hospital to the show cause notice, the hospital may be suspended from providing services to beneficiaries under the scheme and a formal investigation shall be instituted. (ii) If a Provider is not in the “Watch-list”, but the SEC observes at any stage that it has data/evidence that suggests that the Provider is involved in any unethical Practice/is not adhering to the major clauses of the contract with the Insurance Company/Involved in financial fraud related to health insurance patients, it may immediately suspend the Provider from providing services to policyholders/insured patients and a formal investigation shall be instituted. A formal letter shall be send to the concerned hospital regarding its suspension with mentioning the time frame within which the formal investigation will be completed. Step 4 - Detailed Investigation The detailed investigation shall be undertaken for verification of issues raised in disciplinary proceedings and may include field visits to the providers, examination of case papers, talking with the beneficiary/policyholders/insured (if needed), Pradhan Mantri Rashtriya Swasthya Suraksha Mission (PMRSSM) - Guideline Examination of provider records etc. If the investigation reveals that the report/complaint/allegation against the provider is not substantiated, the Insurance Company/SHA would immediately revoke the suspension (in case of suspension) on the direction of the SEC. A letter regarding revocation of suspension shall be sent to the provider within 24 hours of that decision. Step 5 - Presentation of Evidence to the SEC The detailed investigation report should be presented to the SEC and the detailed investigation should be carried out in stipulated time period of not more than 7 days. A letter regarding revocation of suspension shall be sent to the provider within 24 hours of that decision. Step 5 - Presentation of Evidence to the SEC The detailed investigation report should be presented to the SEC and the detailed investigation should be carried out in stipulated time period of not more than 7 days. The insurance company (Insurance mode)/SHA (Trust Mode) will present the findings of the detailed investigation. If the investigation reveals that the complaint/allegation against the provider is correct, then the following procedure shall be followed: (i) The hospital must be issued a “show-cause” notice seeking an explanation for the aberration. (ii) In case the proceedings are under the SEC, after receipt of the explanation and its examination, the charges may be dropped or modified or an action can be taken as per the guidelines depending on the severity of the malafide/error. In cases of de-empanelment, a second show cause shall be issued to the hospital to make a representation against the order and after considering the reply to the second show cause, the SEC can pass a final order on de-empanelment. If the hospital is aggrieved with actions of SEC/SHA, the former can approach the SHA to review its decision, following which it can request for redressal through the Grievance Redressal Mechanism as per guidelines. (iii) In case the preliminary proceedings are under the DEC, the DEC will have to forward the report to the SEC along with its findings and recommendations for a final decision. The SEC may ask for any additional material/investigation to be brought on record and to consider all the material at hand before issuing a final order for the same. The entire process should be completed within 30 days from the date of suspension. The disciplinary proceedings shall also be undertaken through the online portal only. Step 6 - Actions to be taken after De- empanelment Once the hospital has been de-empanelled, following steps shall be taken: (i) A letter shall be sent to the hospital regarding this decision. (ii) A decision may be taken by the SEC to ask the SHA/Insurance Company to lodge an FIR in case there is suspicion of criminal activity. (iii) This information shall be sent to all the other Insurance Companies as well as other regulatory bodies and the MoHFW/NHA. (ii) A decision may be taken by the SEC to ask the SHA/Insurance Company to lodge an FIR in case there is suspicion of criminal activity. (iii) This information shall be sent to all the other Insurance Companies as well as other regulatory bodies and the MoHFW/NHA. (iv) The SHA may be advised to notify the same in the local media, informing all policyholders/insured about the de-empanelment ensuring that the beneficiaries are aware that the said hospital will not be providing services under PMRSSM. (v) A de-empanelled hospital cannot re-apply for empanelment for at least 2 years after de-empanelment. However, if the order for de-empanelment mentions a longer period, such a period shall apply for such a hospital. 9. From a bare perusal of the Step-3 of Part-B of para 1.10 of afore-quoted guidelines, it is evident that where the provider who was on the “Watch-List” or has been issued show cause notice if the SEC observes continuous patterns or strong evidence or irregularity based on either claims data or field visit of the hospital or in case of unsatisfactory reply of the hospital to the show cause notice, the hospital may be suspended from providing services to beneficiaries under the scheme and a formal investigation shall be instituted. 10. Learned counsel for the petitioner and learned counsels for the respondents both jointly stated before us that the procedure has been followed till the stage of suspension and, therefore, that may not be interfered at this stage. Accordingly, we hold that the suspension of empanelment of the petitioner's hospital dated 04.12.2020 shall continue and shall be subject to the final decision as may be taken by the competent authority in accordance with law. 11. Breach of principles of natural justice is an important issue involved in the present writ petition. It has been submitted by learned counsel for the petitioner that the impugned order has been passed without show cause notices and thus the principles of natural justice has been violated. Law of Natural Justice 12. In the case of Uma Nath Pandey & Ors. vs State of U.P.& Anr. [(2009) 12 SCC page 40 para 3], the Hon'ble Supreme Court noted the concept of natural justice and observed that it is another name of common sense justice. Law of Natural Justice 12. In the case of Uma Nath Pandey & Ors. vs State of U.P.& Anr. [(2009) 12 SCC page 40 para 3], the Hon'ble Supreme Court noted the concept of natural justice and observed that it is another name of common sense justice. The adherence to principles of natural justice as recognized by all civilized States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue. 13. The first and foremost principle of natural justice is commonly known as audi alteram partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should appraise the party determinatively the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. It is an approved rule of fair play. 14. The principles of natural justice are those rules which have been laid down by the Courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an order affecting those rights. These rules are intended to prevent such authority from doing injustice. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. 15. Expression `civil consequences' encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations, and non-pecuniary damages. In its wide umbrella comes everything that affects a citizen in his civil life. 16. Natural justice has been variously defined by different Judges, for instance a duty to act fairly, the substantial requirements of justice, the natural sense of what is right and wrong, fundamental justice and fair-play in action. Over the years by a process of judicial interpretation two rules have been evolved as representing the principles of natural justice in judicial process, including therein quasi-judicial and administrative process. Over the years by a process of judicial interpretation two rules have been evolved as representing the principles of natural justice in judicial process, including therein quasi-judicial and administrative process. They constitute the basic elements of a fair hearing, having their roots in the innate sense of man for fair-play and justice which is not the preserve of any particular race or country but is shared in common by all men. The first rule is `nemo judex in causa sua' or `nemo debet esse judex in propria causa sua' that is no man shall be a judge in his own cause. The second rule is `audi alteram partem', that is, `hear the other side'. A corollary has been deduced from the above two rules and particularly the audi alteram partem rule i.e. 'he who shall decide anything without the other side having been heard, although he may have said what is right, will not have been what is right' or in other words, as it is now expressed, `justice should not only be done but should manifestly be seen to be done'. Natural justice is the essence of fair adjudication, deeply rooted in tradition and conscience, to be ranked as fundamental. The purpose of following the principles of natural justice is the prevention of miscarriage of justice. 17. Whenever an order is struck down as invalid being in violation of principles of natural justice, there is no final decision of the case and fresh proceedings are left upon. All that is done is to vacate the order assailed by virtue of its inherent defect, but the proceedings are not terminated. 18. Step-5 of Part-B of para 1.10 of the guidelines specifically requires issuance of two show cause notices. Learned counsel for the respondent Nos. 3,6 and 7 has stated before us on instruction that no show cause notice was issued to the petitioner’s hospital before passing the impugned final order of De-empanelment and the imposition of the penalty. Thus, we find that non issuance of show cause notice to the petitioner’s hospital before passing the final order, has resulted in breach of principle of natural justice. 19. Thus, we find that non issuance of show cause notice to the petitioner’s hospital before passing the final order, has resulted in breach of principle of natural justice. 19. Since it is admitted case of the respondents that neither any show cause notice was issued nor any opportunity of hearing was afforded to the petitioner confronting with the material available in the hands of the respondents, therefore, the impugned order dated 24.12.2020 passed by the Chief Executive Officer of State Health Agency (SHA), U.P. Lucknow cannot be sustained and is hereby quashed. The writ petition is disposed of with the following directions:- (i) The concerned authority shall follow the procedure as provided in Step-5 of Part-B of Para 1.10 of the guidelines and pass a final order within 30 days after affording a reasonable opportunity of hearing to the petitioner. (ii) The order of suspension dated 04.12.2020 shall remain subject to the final order as may be passed by the competent authority regarding De-empanelment and penalty, if any. (iii) The competent authority shall take decision in accordance with law without being influenced by any of the observations on merits of the case made by this Court in the body of this order.