Safiya Malik

The Jammu and Kashmir High Court temporarily stayed the suspension order issued against Shifa Medical Centre under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY). The hospital had challenged the order, citing violations of natural justice and procedural irregularities. The court directed the respondents to finalize the disciplinary proceedings while ensuring the petitioner-hospital was granted a fair opportunity to respond.

The petition, filed by Shifa Medical Centre, contested a show-cause notice dated December 18, 2024, and a suspension order dated January 11, 2025. The hospital argued that the notice and order were issued without following the principles of natural justice or the guidelines under the AB PM-JAY scheme. The petitioner claimed that the two-day period for responding to the notice was inadequate and contended that the authorities had acted under outdated and redundant rules.

The hospital referred to its performance under the AB PM-JAY, submitting that it had received an appreciation certificate from the CEO of the State Health Agency, J&K, on August 15, 2023. Counsel for the petitioner argued that the allegations against the hospital were unverified and that the actions taken by the respondents lacked consistency. The counsel cited precedents, including the Supreme Court decision in Vishnu Traders v. State of Haryana and Others, to argue for uniformity in judicial discretion in similar cases. It was also submitted that many patients under the scheme were suffering due to the suspension.

The respondents, represented by the Deputy Advocate General, contended that the suspension order was issued following complaints of the hospital collecting out-of-pocket payments from patients covered under the scheme. The counsel argued that the actions were in accordance with the scheme's guidelines and denied allegations of relying on outdated rules. It was further submitted that the AB PM-JAY was a public welfare scheme, and hospitals involved in fraudulent practices must be dealt with under the law.

The court noted the rival contentions and reviewed the petition and supporting documents. Referring to the principles of natural justice, the court stated that the respondents should provide the petitioner-hospital with a reasonable opportunity to present its case. The court observed: “It is evident that the petitioner-hospital has not been afforded adequate time to reply to the show-cause notice, which is essential for ensuring fair procedure.”

In its interim order, the court temporarily stayed the suspension order issued against the petitioner-hospital. The court directed: “The operation of the suspension order bearing No. 03 SHA, J&K of 2025 dated 11.01.2025 is kept in abeyance, subject to any vacation or modification upon consideration of objections/arguments.”

The court further directed the respondents to proceed with and finalize the disciplinary inquiry. The court stated: “The respondents shall afford a fresh opportunity of two weeks to the petitioner-hospital to submit its reply to the show-cause notice, in the interest of natural justice.”

The next hearing in the case is scheduled for February 7, 2025.

Case Title: Shifa Medical Centre v. UT of J&K & Ors.

Case Number: WP(C) No. 130 of 2025

Bench: Justice Mohammad Yousuf Wani

[Read/Download order]