Kerala High Court
State Of Kerala vs Accredited Molecular Testing ... on 3 November, 2021
Author: S. Manikumar
Bench: S.Manikumar, Shaji P.Chaly
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
Wednesday, the 3rd day of November 2021 / 12th Karthika, 1943
WA NO. 1439 OF 2021
AGAINST JUDGMENT DATED 4/10/2021 IN WP(C) 11632/2021 OF THIS COURT.
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APPELLANT/1ST RESPONDENT IN THE WRIT PETITION:
STATE OF KERALA,REPRESENTED BY ITS PRINCIPAL SECRETARY,
HEALTH AND WELFARE DEPARTMENT,GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695 001.
BY GOVERNMENT PLEADER
RESPONDENTS/WRIT PETITIONERS AND RESPONDENTS 2 TO 6
IN THE WRIT PETITION:
1.ACCREDITED MOLECULAR TESTING LABORATORIES ASSOCIATION (AMLA),
HAVING ITS OFFICE AT MANIKKATH CROSS ROAD,RAVIPURAM,
ERNAKULAM-682 001,REPRESENTED BY ITS SECRETARY MR.BERLY CYRIAC.
2.SANKARS HEALTHCARE SCANS & DIAGNOSTICS,OPP.T.D.HIGH SCHOOL,
NEAR GENERAL HOSPITAL JUNCTION ALAPPUZHA-688 011.
REPRESENTED BY ITS CEO, DR.R.ANILKUMAR.
3.DIANOVA DIAGNOSTICS (P) LTD.,GOOD SHEPHERD ROAD,
KOTTAYAM-686 001, REPRESENTED BY ITS MANAGING DIRECTOR
DR.SAJIMON THOMAS.
4.MICROLAB LABORATORIES,OPP.DIST.GOVERNMENT HOSPITAL,
KOZHENCHERRY-689 641,REPRESENTED BY ITS MANAGING PARTNER,
MR.BINU K.THOMAS.
5.KDC LAB,MISHAL TOWERS,OPP.LITTLE FLOWER SCHOOL,KANHANGAD,
671 315,REPRESENTED BY ITS ACCOUNTS MANAGER, MR.RENJITH C.
P.T.O.
6.APOLLO MEDICAL LAB,2ND FLOOR,CITY CENTRE,FORT ROAD,
KANNUR-670 001 ,REPRESENTED BY ITS MANAGING PARTNER,MR.P.PRASADAN.
7.LE AYUSH LABORATORY LLP,PRASHANTH BUILDING,NEAR MEDICAL COLLEGE,
KOZHIKODE-673 008,REPRESENTED BY IS PARTNER,MR.NIDHEESH P.K.
8.CARE REFERENCE LABORATORIES,19/31 G & 19/31 H,AMI GALLERIA,
MAVOOR ROAD,KOZHIKODE-673 008,
REPRESENTED BY ITS MANAGING PARTNER,MR.JUSTIN THOMAS KUMAR.
9.DNA DIAGNOSTICS & RESEARCH CENTRE,COCHIN,THEROTH ENCLAVE,
AYISHA ROAD,PONNURUNNY,VYTTILA,ERNAKULAM-682 019,
REPRESENTED BY ITS MANAGING DIRECTOR,MR.ANAND P.S.
10.HI-TECH DIAGNOSTIC CENTRE,NEAR PUBLIC STADIUM,
PALARIVATTOM,COCHIN-682 025,
REPRESENTED BY ITS DIRECTOR, MR.SURESH VARGHESE.
11.EL LAB METROPOLIS,NORTH SQUARE,PARAMARA ROAD,
COCHIN-682 018,REPRESENTED BY ITS LAB HEAD,
DR.RAMESH KUMAR.
12.NEUBERG DIAGNOSTICS (P) LTD., THOMBRA ARCADE,
BEHIND KALOOR METRO STATION,ELAMAKKARA ROAD,
KALOOR,COCHIN-682 017,
REPRESENTED BY ITS GENERAL MANAGER,MR.S.LAKSHMINATHAN.
13.HYGEAMED LABORATORIES,DOOR NO.29/4883/3,ADITHYA ARCADE,
KUNNATHUMANA LANE,SHORANUR ROAD,THRISSUR-680 022,
REPRESENTED BY ITS MANAGING PARTNER,MR.PRAVEEN N.M.
14.UNION OF INDIA,REPRESENTED BY ITS SECRETARY,
HEALTH AND FAMILY WELFARE,NIRMAN BHAVAN,NEW DELHI-110011.
15.INDIAN COUNCIL FOR MEDICAL RESEARCH,V.RAMALINGASWAMI BHAWAN,
P.O.BOX NO.4911,ANSARI NAGAR,NEW DELHI-110029,
REPRESENTED BY ITS SECRETARY AND DIRECTOR GENERAL.
16.KERALA MEDICAL SERVICES CORPORATION LTD.,THYCAUD P.O.,
THIRUVANANTHAPURAM-695 014,
REPRESENTED BY ITS MANAGING DIRECTOR.
P.T.O.
17.SANDOR MEDICAIDS PVT.LTD.,8-2-326/5,ROAD NO.3,
BANJARA HILLS,HYDERABAD-500034,
REPRESENTED BY ITS MANAGING DIRECTOR.
18.NATIONAL ACCREDITATION ROAD FOR TESTING AND
CALIBRATION LABORATORIES,NABL HOUSE,PLOT NO.45,
SECTOR 44,GURUGRAM,HARYANA-122003,
REPRESENTED BY ITS CEO.
BY ADV.SRI.PAUL JACOB FOR R1,2 TO 13.
ASSISTANT SOLICITOR GENERAL OF INDIA SRI.P.VIJAYAKUMAR
FOR R14,15 & 18.
ADV.SRI.M.AJAY FOR R16.
ADVOCATE GENERAL SRI.K.GOPALAKRISHNA KURUP.
Prayer for interim relief in the Writ Appeal stating that in the
circumstances stated in the appeal memorandum, the High Court be pleased
to stay the operation of the judgment dated 04.10.2021 in W.P.(C) No.11632
of 2021, pending disposal of this Writ Appeal.
This Writ Appeal coming on for orders on 03/11/2021 upon perusing
the appeal memorandum, the court on the same day passed the following:
P.T.O.
EXT.P11:TRUE COPY OF ORDER G.O.(RT)NO.980/2021/H & FWD
DATED 30.04.2021.
EXT.P12:TRUE COPY OF THE G.O.(RT)NO.393/2021/DMD
DATED 01.05.2021.
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S. MANIKUMAR, C. J. & SHAJI P. CHALY, J.
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W. A. No. 1439 of 2021
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Dated this the 3rd day of November, 2021
ORDER
S. Manikumar, C. J.
W. P. (C) No. 11632 of 2021 has been filed for the following reliefs:-
"i. Issue writ in the nature of a declaration or other writ order or direction calling for the records leading to Exhibit.P11 and quash the same;
ii. Issue writ in the nature of a declaration or such other writ order or direction calling for the records leading to Exhibit. P12 and quash the same;
iii. Issue a writ in the nature of a mandamus or other writ order or direction and directing the 1st respondent government is to issue necessary guidelines/ directions/orders to defray the expenses reimbursement of private labs to the extent of loss suffered by the private Laboratories below Ext. P8 order and to have the same paid by the end of each month on furnishing of W. A. 1439 of 2021 -2- accounts to the appropriate authority;
iv. Issue a writ in the nature of a declaration declaring that the 1st respondent has no authority or jurisdiction to fix the rates for RT PCR test for Covid-19 with respect to Private Laboratories otherwise than in accordance with law, after hearing them."
2. Sum and substance of the challenge before the writ court is with respect to the power of the State Government in prescribing rates for conducting various tests, including RT-PCR tests, and the rates charged by the private laboratories.
3. Ext. P11 Government Order G. O. (Rt) No. 980/2021/H&FWD dated 30.04.2021 re-fixing the rate for RT-PCR test for Covid - 19 and Ext. P12 Government Order G. O. (Rt) No. 393/2021/DMD dated 01.05.2021, warranting stringent action towards denial by the private laboratories in the State to conduct RT-PCR tests at the revised rate fixed by the Government, are reproduced:-
W. A. 1439 of 2021 -3- W. A. 1439 of 2021 -4- W. A. 1439 of 2021 -5- W. A. 1439 of 2021 -6- W. A. 1439 of 2021 -7-
4. After considering the pleadings and submissions, powers of the Governments, in particular, the Central Government, the Drugs and Cosmetics Act, 1940, vis-a-vis the provisions under the Disaster Management Act, 2005, which deal with effective management of disasters and matters connected therewith, the Constitutional entries dealing with drugs, Entry 6 in List No. II of 7 th Schedule of the Constitution of India, Entry 34 in List No. III of 7 th Schedule of the Constitution of India, writ court, set aside Exts. P11 and P12, however, kept the order setting aside Exts. P11 and P12 in abeyance for a month, enabling the Principal Secretary, Health and Family Welfare Department, Government Secretariat, Thiruvananthapuram, respondent No. 1 therein, to take a fresh decision, regarding the rate at which RT- PCR tests should be conducted by the private laboratories in the State, after discussing with the owners / representatives of such private laboratories. Being aggrieved, instant writ appeal is filed. W. A. 1439 of 2021 -8-
5. Some of the points which are highlighted by Mr. K. Gopalakrishna Kurup, learned Advocate General, for consideration are as hereunder:-
"i. The Learned Single Judge erred in finding that the powers contained under Section 2 of the Epidemic Diseases Act, 1897 or Section 86 of the then prevalent Travancore -Cochin Public Health Act, 1955 or Section 81 of the then prevalent Madras Public Health Act, 1939 could not be taken recourse to for fixing the price of RT-PCR Tests. The finding of the Learned Single Judge that Exhibit P11 G.O (Rt) No. 980/2021/H&FWD dated 30.04.2021 (fixing the price of RTPCR Tests at Rs. 500/-) could not be treated as an order issued by the State in exercise of the powers vested in it under the provisions of the Disaster Management Act 2005, Epidemic Diseases Act 1897, the then prevalent Travancore- Cochin Public Health Act, 1955 and Madras Public Health Act, 1939 as well as Kerala Epidemic Diseases Act, 2020 and the executive power vested in the Government of Kerala under Article 162 of the Constitution, in relation to Entry 6 of List II of VIIth Schedule thereto, is wrong.
ii. The Learned Single Judge erred in overlooking that Section 2(1) of the Epidemic Diseases Act, 1897 provided that when State was satisfied that the State or any part thereof was threatened with an outbreak of any dangerous epidemic disease and the State thought fit that the ordinary provisions of the law W. A. 1439 of 2021 -9- for the time being in force were not sufficient for the purpose, it could, either by itself or through a person empowered to act, take such measures and by putting notice, prescribe such temporary regulations to be observed by the public or by any person or class of persons, to prevent the outbreak of such disease or the spread thereof, and could determine in what manner and by whom such expenses incurred should be defrayed. The Learned Single Judge overlooked the fact that the RTPCR tests were conducted in pursuance of the avowed policy of Test, Track and Treat (Test to identify the persons infected with COVID or to satisfy that persons are not affected with COVID, Track such persons and the persons who have interacted with them and Treat the infected), which were definitely part of managing the outbreak and the spread of the said disease, and that, therefore, fixation of the price of RTPCR Tests was covered by the provisions of Section 2(1) of the Epidemic Diseases Act, 1897.
iii. Section 81 of the then prevalent Madras Public Health Act, 1939 and Section 86 of the then prevalent Travancore
-Cochin Public Health Act, 1955 enabled the Government to frame Rules for preventing the spread of any epidemic, endemic or infectious diseases. It is trite and settled law that if powers are conferred by a statute on an authority to frame Rules, necessarily Executive Orders can be issued. RTPCR Tests are conducted to identify persons infected with COVID, so as to manage its spread. Therefore, fixation of the price of RTPCR Tests was covered by the provisions of Section 81 of the Madras Public W. A. 1439 of 2021 -10- Health Act, 1939 and Section 86 of the Travancore -Cochin Public Health Act, 1955 and Exhibit P11 G.O (Rt) No. 980/2021/H&FWD dated 30.04.2021 (fixing the price of RTPCR Tests at Rs. 500/-) is sustainable in law. Consequentially, Exhibit P12 G.O. (Rt) No. 393/2021/DMD dated 01.05.2021 is also sustainable in law.
iv. Entry 6 in List II of Seventh Schedule of the Constitution of India templates "public health", which comprehends measures to compact the spread of an epidemic or pandemic and thus takes in conduct of RTPCR Tests for testing whether a person is COVID infected or not, tracking the infected persons and persons who had contact with such infected persons and treating the COVID infected, so as to mitigate and manage the spread of COVID, consequentially including fixation of prices of RT PCR Tests also. Thus, Entry 6 in List II of Seventh Schedule of the Constitution, coupled with Article 162 therein empowers the appellant to fix the prices of RTPCR Tests.
v. The Learned Single Judge erred in overlooking the fact that G.O (Rt) No. 980/2021/H&FWD dated 30.04.2021 (fixing the price of RTPCR Tests at Rs. 500/-) and G.O (Rt) No. 393/2021/DMD dated 01.05.2021 are orders passed in the interest of containment of COVID-19, its management and reducing mortality during its surge. In the said circumstances, the same are sustainable in terms of the provisions of Section 20 read with Sections 24 and 65 of the Disaster Management Act, 2005. W. A. 1439 of 2021 -11- vi. The finding of the Learned Single Judge that the State was obligated to discuss the price fixing of RT-PCR test with private laboratories, is wrong. The further finding of the Learned Single Judge that the State did not have a case till the issuance of the order fixing the price of Rs. 1,700/-, that they had all the powers to fix the price without any discussion with private laboratories and without hearing them, is wrong. The Learned Single Judge ought to have taken note of the fact that such discussions, done as an onetime measure, could not be cited as a precedent to mandate that the State had to hear them in all situations of invoking its legislative function of price fixation or that it entitled the petitioners to seek the aid of this Hon'ble Court to issue a direction to the State to hear them before fixing the rates.
vii. The Learned Single Judge erred in overlooking the trite and settled legal position that Price fixation was neither the function nor the forte of the Court and that the Court could only enquire into the question whether relevant considerations had gone in and irrelevant considerations were kept out of the determination of the price.
viii. The Court below erred in not relying upon the materials produced on behalf of the appellant State in support of fixation of price of RT-PCR at Rs.500/-. In the statement filed in Writ Petition (Civil) No.10997 of 2021 as well as the counter affidavit therein, the appellant has explained the basis for refixation / revision of the rate for RT-PCR test by various orders, W. A. 1439 of 2021 -12- including G.O (Rt) No. 371/2021/H&FWD dated 08.02.2021 and G.O (Rt) No. 980/2021/H&FWD dated 30.04.2021 (fixing the price of RTPCR Tests at Rs. 500/-). The letter dated 01.07.2020 of the Secretary, Ministry of Health and Family Welfare and the Secretary, Department of Health Research and Director General of ICMR, whereby the State Governments were asked to finalise the rates for RT-PCR test by the private laboratories and the extract of rates for RT-PCR tests in different States were produced. The details of the periodic reduction in the rates of the components and materials for RTPCR Test kits were stated. The prices fixed by Mobile Laboratories and Private Static Labs were stated. The Learned Single Judge overlooked the cardinal aspect that the price of the RTPCR Test was fixed on consideration of such relevant materials.
ix. The Learned Single Judge erred in overlooking the fact that RTPCR Tests was only one among the multifarious tests conducted in the laboratories of the writ petitioners and that the income from the same had considerably lesser impact on the income and expenses of the laboratories, when taken as a whole x. The Learned Single Judge erred in overlooking the trite and settled legal position that Courts should not re-evaluate the considerations, even if the prices were demonstrably injurious to some manufacturers or producers, except to the extent of hostile discrimination.
xi. The finding of the Learned Single Judge that "drugs", as W. A. 1439 of 2021 -13- defined in the Drugs and Cosmetics Act, 1940 included all substances intended to be used for or in the diagnosis, which would take in diagnostic tools", is wrong. The Learned Single Judge omitted to take note of the fact that "drugs" would take in only such devices notified by the Central Government by notification. At any rate, RTPCR Test kits and materials will not answer to the definition of "drugs", as defined in the Drugs and Cosmetics Act, 1940.
xii. The Learned Single Judge erred in entering into a finding to the effect that price fixation of RTPCR test was covered by an occupied legislation under Entry 34 of List III of Schedule 7 to the Constitution of India. The finding that the same was covered by Essential Commodities Act and Drugs (Price Control) Orders framed under the same, is also wrong. In so far as kits and materials for RTPCR tests or the RTPCR test as such cannot be said to be answering to the definition of "drugs" under the Drugs and Cosmetics Act, 1940, price fixation of the same cannot be said to be covered by an occupied legislation, whether be it Essential Commodities Act or Drugs (Price Control) Orders framed under the same."
6. Added further, Mr. K. Gopalakrishna Kurup, learned Advocate General, submitted that acting on the directions issued by the writ court, a discussion was made with the owners / representatives of the private laboratories, on the rate for conducting RT-PCR test, and W. A. 1439 of 2021 -14- accordingly, Government has issued G. O. (Rt) No. 2381/2021/H&FWD dated 01.11.2021, keeping the maximum rate chargeable for RT-PCR test for Covid - 19 at Rs. 500/-.
7. Issues raised as regard the competence of the State Government to prescribe the rate for Covid - 19 RT-PCR tests, with reference to the statutory provisions dealt with by the writ court, requires adjudication, and therefore, we deem it fit to admit W. A. No. 1439 of 2021.
8. Mr. Paul Jacob, learned counsel, takes notice for Accredited Molecular Testing Laboratories Association (AMLA), represented by its Secretary, Manikkath Cross Road, Ravipuram, Ernakulam, respondent No. 1 and also the members of the said Association, respondent Nos. 2 to 13.
9. Mr. M. Ajay, learned counsel, takes notice for the Kerala Medical Services Corporation Ltd., represented by its Managing Director, Thycaud, Thiruvananthapuram, respondent No. 16.
10. Mr. P. Vijayakumar, learned Assistant Solicitor General, takes W. A. 1439 of 2021 -15- notice for respondent Nos. 14, 15 and 18.
11. Issue notice to Sandor Medicals Pvt. Ltd., 8-2-326/5, Road No. 3, Banjara Hills, Hyderabad, represented by its Managing Director, respondent No. 17, by speed post, returnable in two weeks.
Post after three weeks.
Sd/-
S. MANIKUMAR CHIEF JUSTICE Sd/-
SHAJI P. CHALY JUDGE Eb 03-11-2021 /True Copy/ Assistant Registrar