Suspension Of Hospital License Based On Unfurnished Reports & Unrecorded Oral Complaint Violates Natural Justice: Madras High Court - 2025-10-06

Madras High Court Quashes Hospital's License Suspension, Cites Grave Violations of Natural Justice and Jurisdictional Overreach

Madurai, India – In a significant ruling on administrative procedure and medical regulation, the Madras High Court has quashed an order suspending the license of 'Irudhayams Hospital' in Nagercoil. Justice V. Lakshminarayanan held that the suspension, initiated based on an unrecorded "oral complaint" and reliant on reports never furnished to the petitioner, was a blatant violation of the principles of natural justice and an excess of jurisdiction.

The court emphasized that an authority cannot deny crucial documents to an individual against whom it is taking action and that its powers are strictly confined to the statute under which it operates.

Background of the Case

The writ petition was filed by Dr. M.G. Ethayarajan, an MBBS doctor who runs Irudhayams Hospital, challenging the suspension of his clinical establishment's license by the Joint Director of Medical and Rural Health Services, Kanyakumari. The action was triggered by a surprise inspection on February 19, 2025, which authorities claimed was based on an "oral complaint" from the District Collector.

The authorities alleged that Dr. Ethayarajan, who used non-invasive techniques like Enhanced External Counter Pulsation (EECP) and Cartography, was: 1. Treating cardiac patients without the requisite specialist qualifications. 2. Advertising using unrecognized degrees. 3. Charging exorbitant fees.

Following the inspection and an enquiry, the District Advisory Committee resolved to suspend the hospital's license, leading to the impugned order.

Petitioner's Arguments: A Procedural Nightmare

Senior Counsel Mr. Sricharan Rangarajan, representing Dr. Ethayarajan, mounted a strong challenge on procedural grounds, arguing: * Denial of Natural Justice: The petitioner was never provided with copies of the initial inspection report, the subsequent enquiry committee's findings, or the Advisory Committee's resolution, despite requesting them. This prevented him from mounting an effective defence. * Jurisdictional Overreach: The Joint Director wrongly invoked regulations of the National Medical Commission (NMC) to suspend the license. The court was told that enforcement of NMC regulations is the sole prerogative of the Medical Council, not the authority under the Tamil Nadu Clinical Establishments (TNCE) Act. * No Statutory Violation: The TNCE Act and its rules do not mandate a specialist cardiologist for operating EECP or Cartography equipment. Therefore, the primary basis for the suspension was non-existent in the governing statute. * 'Oral Complaint' Anomaly: The entire proceeding was initiated on a vague and unrecorded "oral complaint," casting a "huge and a dark cloud" over its legitimacy.

Respondent's Defence: A Fact-Finding Exercise

The Special Government Pleader, Mr. S. Shaji Bino, defended the suspension, contending that: * The petitioner should have exhausted the alternate remedy of an appeal. * The withheld reports were merely from "fact-finding" exercises and not sharing them caused no prejudice. * Dr. Ethayarajan was projecting himself as a cardiology specialist using unrecognized foreign degrees, a violation of medical ethics. * The authority was empowered under the TNCE Act to take action to ensure proper medical practice.

Court's Scathing Analysis

Justice V. Lakshminarayanan systematically dismantled the respondents' case, making several key observations.

On Violation of Principles of Natural Justice

The court firmly rejected the argument that an alternate remedy barred the writ petition, citing the clear violation of natural justice as a valid exception. It found that the authorities had relied on the inspection reports to issue the show-cause notice and pass the final order. The judgment noted:

"One of the fundamental principles of natural justice is that the authority has to share the documents... with the person who has to answer the accusation... Since this fundamental principle... has been violated in this case, I am constrained to reject the argument that I have to non-suit the writ petitioner."

The court also highlighted that the petitioner had, in fact, requested the documents via email, making the failure to provide them inexcusable.

On the 'Oral Complaint' and Bias

The judgment expressed deep suspicion about the proceedings' origin, noting the failure to record the District Collector's alleged oral complaint, contrary to established principles of administrative accountability.

Furthermore, the court found clear evidence of bias in the enquiry process. An expert opinion against the petitioner was provided by one Dr. Muralidharan, who was also a member of the very committee conducting the enquiry. Citing Supreme Court precedent, Justice Lakshminarayanan held this to be a grave procedural impropriety:

"A person cannot be a member of the Committee and at the same time, be a witness before the same... This seriously vitiates the entire proceedings."

On Lack of Jurisdiction

The court concluded that the respondent had acted beyond its powers. The TNCE Act and its rules did not prohibit an MBBS doctor from using EECP or Cartography. The authority could not invent a new requirement and penalize the petitioner for it.

"When the Rules do not prescribe any standards, to visit the petitioner with an order of suspension on the basis of a non-existing rule is in excess of jurisdiction conferred on the authority."

The court clarified that the power to act against alleged professional misconduct under NMC regulations lies with the Medical Council, not the Joint Director under the TNCE Act.

Final Verdict and Implications

Finding the impugned order vitiated by gross violations of natural justice, bias, and a lack of jurisdiction, the High Court quashed it entirely. As the defects were jurisdictional, the court refrained from remanding the matter for reconsideration.

The ruling serves as a stark reminder to administrative authorities that procedural fairness is not a formality and that they cannot act beyond the strict confines of their statutory powers, regardless of their intentions. It reinforces the principle that any action affecting a citizen's fundamental right to practice a profession must be transparent, unbiased, and strictly in accordance with the law.