Madras High Court Quashes License Cancellation of Cethar Hospital

Court rules cancellation violated principles of natural justice under Transplantation of Human Organs and Tissues Act, 1994

In a significant ruling, the Madras High Court has quashed the cancellation of the organ transplantation license of M/s Cethar Hospital. The decision was rendered by Justice G.R. Swaminathan of the Madurai Bench, who found that the appropriate authority failed to follow the statutory procedure outlined in Section 16 of the Transplantation of Human Organs and Tissues Act, 1994. 

The hospital's license, which permitted liver and kidney transplants, was initially suspended on July 23, 2025, and subsequently cancelled on August 18, 2025. The hospital challenged these actions, arguing that the cancellation was executed without issuing a show cause notice or providing a reasonable opportunity to be heard, as mandated by the Act.

The court examined the statutory requirements under Section 16, which necessitates the issuance of a notice and an opportunity for a hearing before a license can be suspended or cancelled. Justice Swaminathan underscored that the principles of natural justice were not adhered to, as the hospital was neither issued a notice nor granted a hearing to rebut the allegations against it. 

The Additional Advocate General, representing the state, argued for the dismissal of the writ petition on the grounds of maintainability, citing that the hospital had already filed appeals under Section 17 of the Act. However, the court observed that while two parallel remedies cannot be pursued simultaneously, the petitioner had the right to elect the writ remedy, especially given the severe procedural lapses by the authority.

The court further remarked that public opinion should not influence judicial decisions and emphasized the importance of following due process. Justice Swaminathan noted that while the issue has stirred public and media interest, judicial outcomes should remain insulated from external pressures.

The ruling also clarified that the prior suspension order would not be reinstated, as it was subsumed by the cancellation. The appropriate authority retains the right to proceed according to law, provided that due process is observed.

This decision sets a precedent in ensuring strict compliance with statutory procedures in administrative actions, particularly in sensitive areas such as organ transplantation.

Bottom Line:

Transplantation of Human Organs and Tissues Act, 1994 - Cancellation of registration - Due process of law must be strictly followed, including issuance of notice and granting reasonable opportunity of being heard - Principles of natural justice must be adhered to.

Statutory provision(s): Transplantation of Human Organs and Tissues Act, 1994, Section 16

M/s. Cethar Hospital v. Principal Secretary to the Government, (Madras)(Madurai Bench) : Law Finder Doc Id # 2803891