{"id":351670,"date":"2025-06-27T13:00:24","date_gmt":"2025-06-27T07:30:24","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=351670"},"modified":"2025-07-01T09:50:04","modified_gmt":"2025-07-01T04:20:04","slug":"kerala-hc-upholds-clinical-establishments-act-arbitrariness-not-unconstitutional","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/06\/27\/kerala-hc-upholds-clinical-establishments-act-arbitrariness-not-unconstitutional\/","title":{"rendered":"\u2018An enactment cannot be struck down merely on account of alleged arbitrariness\u2019; Kerala HC upholds Kerala Clinical Establishments Act"},"content":{"rendered":"
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Kerala High Court:<\/span> In a batch of writ petitions challenging various provisions of the Kerala Clinical Establishments (Registration and Regulation) Act, 2018 (\u2018the Act\u2019) and the Rules framed thereunder on grounds of unconstitutionality and arbitrariness, the Single Judge Bench of Harisankar V. Menon, J., held that an enactment cannot be struck down merely on account of alleged unreasonableness or arbitrariness. Accordingly, the Court dismissed the petitions, which included objections to provisions such as the mandatory display of fees charged by clinical establishments for their services.<\/p>\n

Issues, Analysis and Decision<\/h3>\n

1. Can the State of Kerala enact the legislation in question, on the face of the Central Act, i.e. Clinical Establishments (Registration and Regulation) Act, 2010<\/a><\/span>?<\/p>\n

The Court noted that under Article 246(3), the State Legislature was empowered to enact laws concerning matters listed in List II of the Seventh Schedule to the Constitution. It was not in dispute that Entry 6 in List II\u2014\u201cPublic health and sanitation; hospitals and dispensaries\u201d\u2014fell within the State\u2019s exclusive legislative domain, and that the State had enacted the legislation in question pursuant to this entry.<\/p>\n

The Court further observed that, under certain circumstances, even Parliament was entitled to legislate on State List subjects, namely: in the national interest under Article 249, or during a proclamation of emergency under Article 250.<\/p>\n

The Court noted that under Article 252(1)<\/a> of the Constitution<\/a>, two or more States could, by resolutions passed by their Legislatures, empower Parliament to make laws on subjects ordinarily outside its competence, specifically those in the State List, provided such resolutions were passed unanimously by all Houses of the participating States’ Legislatures It was observed that the Central Act in question had been enacted on the basis of resolutions from as many as four States. Under Article 252(2), any State that did not initially participate could choose to \u201cadopt\u201d the legislation later by passing its own resolution.<\/p>\n

The Court clarified that the Constitution did not mandate that States which chose not to adopt the central legislation were barred from independently legislating under Article 246 on the same subject matter. Furthermore, a reading of the Central Act, particularly Section 1(2) confirmed that the adoption mechanism for non\u00e2\u20ac\u2018sponsoring States was optional, not compulsory.<\/p>\n

2. Are the impugned Act and the Rules made thereunder unconstitutional?<\/p>\n

The Court reiterated that a legislative enactment can only be struck down on two constitutional grounds: (i) lack of legislative competence; or (ii) violation of fundamental rights or any other constitutional provision.<\/p>\n

Applying this principle, the court found no legislative incompetence\u2014neither in terms of Entry 6 of List II of the Seventh Schedule nor under Article 252. Moreover, the petitioners had not demonstrated any infringement of constitutional provisions or fundamental rights. Consequently, there was no basis to strike down the legislation.<\/p>\n

After referring to Rajbala<\/span> v. State of Haryana<\/span>, (2016) 2 SCC 445<\/a>, wherein it was held that an enactment cannot be struck down merely on account of the alleged unreasonableness\/ arbitrariness, the Court concluded that the challenge against the constitutionality of the Act in question is, therefore, only to be rejected.<\/p>\n

3. Are the provisions of the Act requiring the display of \u201cfee rate\u201d and \u201cpackage rate\u201d, without defining the \u201cfee rate\u201d and \u201cpackage rate\u201d, unenforceable?<\/p>\n

The Court noted that the petitioners had contended that every clinical establishment was required to mandatorily display the \u201cfee rate\u201d and \u201cpackage rate\u201d for the services and facilities provided\u2014including procedures\u2014and that no clinical establishment was permitted to charge fees exceeding those displayed. They argued that the statute was silent on the definition of \u201cfee rate\u201d and \u201cpackage rate,\u201d and therefore the provisions were unenforceable.<\/p>\n

However, the Court observed that both the Supreme Court and the Kerala High Court had previously issued clear directions enforcing these requirements:<\/p>\n

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  1. The Supreme Court, in its order dated 27-02-2024 in Veterans Forum for Transparency in Public Life v. Union of India<\/span>1<\/sup><\/a>, had directed the Health Secretary to convene meetings with State and UT counterparts to finalize a concrete proposal for fixing these rates<\/li>\n
  2. \n

    A Division Bench of the Kerala High Court, in Sabu P. Joseph<\/span> v. State of Kerala<\/span>, 2021 SCC OnLine Ker 2148<\/a>, had already directed private hospitals in Kerala to display service rates as mandated under Section 39 of the Act read with Rule 19 of the Rules<\/p>\n<\/li>\n<\/ol>\n

    Accordingly, the Court held that the petitioners could not challenge Section 39 on the grounds stated. Especially since the petitioners\u2014Kerala Private Hospitals Association and Indian Medical Association\u2014had actively participated as respondents before the Division Bench and had been heard before those directions were issued. Thus, the provisions remained enforceable.<\/p>\n

    4. Does the provision entitled the suspension\/cancellation provide for unbridled powers on the statutory Authority?<\/p>\n

    The Court noted that the petitioners had raised concerns regarding the alleged unregulated and arbitrary powers conferred upon the statutory authority under the Act, 2018, particularly under Section 14(3), which allows for cancellation of registration citing \u201cimminent danger to public health.\u201d The petitioners argued that the term \u201cimminent danger\u201d was undefined, thereby leaving scope for misuse.<\/p>\n

    However, the Court clarified that Section 14(3) merely outlines the functions of the registration authority and does not itself grant the power of cancellation. The actual power of cancellation lies under Section 25, which contains specific conditions and safeguards, including the need for:<\/p>\n