# Dr. Mukesh Tandon v. State of U.P. & Ors

- **Citation:** (2021) 9 ILRA 1036
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-03-15
- **Case number:** Writ C No. 1037 of 2021
- **Bench:** Surya Prakash Kesarwani, Ravi Nath Tilhari
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/dr-mukesh-tandon-v-state-of-u-p-ors-47347
- **Pages:** 7

## Headnote

C.S.C., A.S.G.I.,Sri Arvind Kumar Goswami,
Sri Arvind Kumar Singh, Sri Suryabhan
Singh, Sri Madhukar Ojha

A. Practice & Procedure - Natural Justice -
The non issuance of show cause notice to the
petitioner's hospital before passing the order of
de-empanelment and imposition of the penalty
has resulted in breach of principle of natural
justice. (Para 18)

Writ Petition Disposed of. (E-10)

List of Cases cited:

## Text

1036 INDIAN LAW REPORTS ALLAHABAD SERIES
apex court in Joint Collector Ranga Reddy
District and another (supra) is on entirely
different set of facts because there the
information of incorrect entries was in
public domain and with the authorities, as
custodian of the records, who sought their
correction, whereas in the instant case the
information
with
regard
to
nonreconciliation of the export advances was
either with the authorised dealer or with the
noticee itself and not with the Enforcement
Directorate or the complainant, therefore
the principle of law laid down by the apex
court in Joint Collector Ranga Reddy
District and another (supra) would not
come to the aid of the petitioner in
maintaining a challenge to the show cause
notice.

29. In view of the discussion made
above, as we find that the complaint
discloses all the necessary ingredients to
make out a prima facie case with regard to
contravention of the provisions of FEMA,
the impugned show cause notice issued for
adjudication of that complaint does not
suffer from any legal infirmity which may
justify its quashing, as has been prayed for.
The petition is dismissed.

30. It is made clear that dismissal of
this petition and any observation made in
this order will not prejudice the right of the
petitioner to set up its defence, as may be
advised,
to
the
notice
and
in
the
adjudicatory proceeding.
----------
(2021)09ILR A1036
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 15.03.2021

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE RAVI NATH TILHARI, J.

Writ C No. 1037 of 2021

Dr. Mukesh Tandon ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Avneesh Tripathi, Sri Anoop Trivedi
(Senior Adv.)

Counsel for the Respondents:
C.S.C., A.S.G.I.,Sri Arvind Kumar Goswami,
Sri Arvind Kumar Singh, Sri Suryabhan
Singh, Sri Madhukar Ojha

A. Practice & Procedure - Natural Justice -
The non issuance of show cause notice to the
petitioner's hospital before passing the order of
de-empanelment and imposition of the penalty
has resulted in breach of principle of natural
justice. (Para 18)

Writ Petition Disposed of. (E-10)

List of Cases cited:

1. Uma Nath Pandey & ors. Vs St. of U.P. & anr.
(2009) 12 SCC page 40

(Delivered by Hon'ble Surya Prakash
Kesarwani, J.
& Hon'ble Ravi Nath Tilhari, J. )

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
9 All Dr. Mukesh Tandon Vs. State of U.P. & Ors.
1037

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. 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
1038 INDIAN LAW REPORTS ALLAHABAD SERIES
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.

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
9 All Dr. Mukesh Tandon Vs. State of U.P. & Ors.
1039

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. 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
deempanelment, 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 deempanelled, 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.

(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
1040 INDIAN LAW REPORTS ALLAHABAD SERIES
hospital will not be providing services
under PMRSSM.

(v) A de-empanelled hospital
cannot re-apply for empanelment for at
least
2
years
after
deempanelment.
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 Step3 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. 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
9 All Dr. Mukesh Tandon Vs. State of U.P. & Ors.
1041
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 nonpecuniary 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 quasijudicial 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. 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.
1042 INDIAN LAW REPORTS ALLAHABAD SERIES

(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.
----------
(2021)09ILR A1042
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.03.2021

BEFORE

THE HON'BLE SANJAY YADAV, J.
THE HON'BLE PRAKASH PADIA, J.

Writ C No. 1868 of 2021

M/s Ramraja Traders, Jhansi ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Udayan Nandan, Sri Shashi Nandan

Counsel for the Respondents:
C.S.C.

A. Practice & Procedure - U.P. Minor
Minerals (Concession) Rules, 1963 - The
Court rejected the contention of the petitioner
that the order passed by the Supreme Court
in the SLP applied only to the Courts and
Tribunals and not to the Authorities like the
Revisional Authority under 78 of the Rules,
1963 who are quasi-judicial in nature. The
Revisional Authority, a quasi judicial authority,
can be brought within the ambit of Tribunal.
(Para 16)

Revision under Rule 78 of 1963 lies even
against an order remitting the matter. (Para
18)
Certain requisite conditions were laid down for
the bidders for the settlement of mining leases
of sand/moram. The petitioner did not comply
with the conditions which led to forfeiture of his
earnest money. (Para 19)

Writ Petition Rejected. (E-10)

List of Cases cited:

1. Shivji Nathubhai Vs UOI & ors. AIR 1960 SC
606

2. Harinagar Sugar Mills Ltd. Vs Shyam Sunder
Jhunjhunwala & ors. AIR 1961 SC 1669

(Delivered by Hon'ble Sanjay Yadav, J.
&
Hon'ble Prakash Padia, J.)

Sri Shashi Nandan, learned Senior
Counsel assisted by Sri Udayan Nandan,
learned counsel appears on behalf of
petitioner.

Learned Standing Counsel appears on
behalf of State-Respondents.

1. A Notice Advertisement was
published on 13.09.2018
by
District
Magistrate, Banda for the settlement of
mining leases of sand/moram under the
U.P. Minor Minerals (Concession) Rules,
1963 for 5 mining Blocks, by e-tendering
and as per Condition No. 13 (6) of the
Government
Order
dated
14.08.2017
respective
applicants
had
to
deposit
Rs.15,000/- as application fee and 25% of
the bid amount as earnest money separately
for each area. That term and condition
no.19 and 22 (1) of the Advertisement
stipulated that within three days from the
date of acceptance of bid, the successful
bidder
shall
deposit
the
requisites
mentioned
therein
and
that
before
participating in the bid the bidders were
first require to satisfy themselves by