Organ scam: Madras HC quashes order cancelling license of hospital in Tiruchy

MADURAI: The Madurai bench of Madras High Court quashed an order cancelling the license of a private hospital, which has been involved in the alleged kidney racket, in Tiruchy, to conduct liver and kidney transplantations.

The hospital administration filed a petition challenging the cancellation of license, which was initially suspended on July 23, 2025 and permanently cancelled on August 18.

Counsel for the petitioner contended that the impugned orders are liable to be quashed since the Director of Medical and Rural Health Services did not adhere to the procedure set out in Section 16 of the Transplantation of Human Organs and Tissues Act, 1994 by not issuing show cause notice.

The Additional Advocate General emphasised the fact that the issue has rocked the entire state.

The media, particularly, the social media, was abuzz with sensational stories which also acquired political colour.

The division bench on August 25 thought it fit to constitute a special investigation team to probe the matter. He also hinted that if this court were to come to the rescue of the petitioner by setting aside the impugned orders, the general public would view the development negatively. Citing these, the Additional Advocate General called upon this Court to dismiss the plea.

After considering the rival contentions and going through materials on record, Justice GR Swaminathan in his order said notice has to be issued before suspension where it’s proposed to be a punishment, but need not be issued when suspension is likely to be followed by cancellation.

But in the suspension order, reasons must be recorded in writing. Issuance of notice can be dispensed with only by recording the reasons contemplated in the proviso to Section 16 (2) of the Act.

Registration can be suspended by way of punishment or cancelled only after the licensee or registrant is given reasonable opportunity of being heard.

Proper enquiry must be conducted and the institution must be given full and fair opportunity to rebut the allegations made against them.

Section 16(2) of the Act clearly states that only after giving reasonable opportunity of being heard to the hospital, the appropriate authority can cancel the registration. The said procedure has been given a complete go by. The respondent authority did not adhere to the principles of natural justice as enshrined in the provision. A mere look at the order of cancellation is enough to conclude that the statutory procedure has been totally disregarded.

No notice was issued. No hearing was given. The materials said to have been gathered by the authority were not furnished to the petitioner. On this sole ground of violation of principles of natural justice and the fact that the procedure contemplated under Section 16 of the Act was not complied with, the order of cancellation is set aside.