Why Cancelling Max Hospital's License Is Commendable in Spirit but Bad in Law

It is the Medical Council of India and not the Delhi government that is empowered to delicense and punish doctors or hospitals guilty of negligence or malpractice.

Max Hospital in Shalimar Bagh. Credit: PTI/File photo

My first reaction on hearing that the Delhi government had cancelled the license of the Max Hospital in Shalimar Bagh, Delhi, was one of shock, even as I tried to understand how a hospital can peremptorily be ordered to shut down and turn away the sick in need of treatment. My thoughts went out to the several desperately ill patients scheduled for surgery today and tomorrow and the days ahead. Where do they go?

The Delhi government order

In its four page order dated December 8, 2017, the Delhi government cancelled the license issued to Max hospital on three grounds:

  1. That it had violated the condition of providing free treatment to the poor. Free land was granted to Max on condition that it would provide free treatment to 10% of its inpatients and 25% of its outpatients. An inspection carried out on November 20, 2017 showed that the Economically Weaker Section Cell was non functioning and had a few broken chairs lying around. Records of November 15 and 17 also showed barely 8% of patients had been provided free treatment;
  2. That in accordance with a May 12, 2017 order, the government had permitted Max to increase its bed strength by 10-20% to cope with the onrush of dengue, chikungunya and fever cases. This permission was valid till November 7, 2017. But on the date of inspection cited above, it was found that the beds were still not only operational but also being used for non fever cases – hysterectomy, DJ Stenting and so on;
  3. That the hospital was guilty of criminal negligence in the case reported by the media where a baby boy born in the hospital was declared dead when he was actually alive.

Given the gravity of the violations, a show cause notice was issued regarding items 1 and 2 on November 22, 2017. The reply furnished on November 27, 2017 was found to be unsatisfactory. Then the incident at item 3 was reported in the media on November 30, 2017 that triggered anger and distress among the people. Given that this incident came soon after with the equally reprehensible case of Fortis hospital charging Rs 16 lakh to treat a dengue case, passions were running high. In order to address public anger, the third charge was also added and the license suspended under section 7 of the Delhi Nursing Home Act (DNHA) of 1953 vide order dated December 8, 2017.

The issue

It is instructive to understand the relevant sections of the Act under which this unprecedented step has been taken by the Delhi government. Section 7, that deals with cancellation of registration, states: Subject to the provisions of this Act, the supervising authority may at any time cancel the registration of a person in respect of any nursing home on any ground…

Section 8, however, does put a rider that such cancellation must be preceded by one month’s notice to be issued indicating the intention to cancel, and also furnishing the grounds.

The Delhi Nursing Home Act of 1953 and the rules thereof issued at different points in time relate to the registration of hospitals with the medical authorities, maintaining patient records and adhering to certain standards in the infrastructure and human resources to be deployed, particularly in the Intensive Care Units of hospitals. In other words, the Act and its rules neither cover the need to provide free treatment nor matters related to medical negligence.

Free treatment to the poor: the background

Over the years, the Delhi government granted free land to over 42 private hospitals subject to the condition that a proportion of the patients be provided free treatment. Non-adherence to this condition led to a PIL filed by a group of lawyers in 2002. In its judgment of March 2007, the Delhi high court accepted the recommendations of the Qureshi Committee report of 2000 and directed the Delhi government to develop a system of enforcing the condition of free cashless treatment to 10% of in-patients and 25% of outpatients who are indigent. With the Supreme Court upholding the high court’s orders, the Delhi government issued guidelines in 2011, laying down a system of referrals to the concerned private hospitals and close monitoring by government.

To its credit, the Aam Aadmi Party (AAP) government has been consistent in its position to implement and enforce these conditions and has been against the principle of profiteering on health. Soon after forming the government, in December 2015, show cause notices for not providing free care were issued to 34 major hospitals. In 2016, a whopping fine of Rs 650 crore was imposed on five of them, a sum calculated on the principles laid down by the high court in its 2007 order. Max was one of the hospitals then. The current action taken to cancel the registration of Max hospital has to thus be viewed in this backdrop.

Sustainability of the orders

What emerges from the above is that the cancellation under section 7 of the DNHA does not stand for two reasons: the first two reasons of non compliance of conditions laid down vide an executive order do not empower the Delhi government to cancel registration of the license. It is only the land granting body – Delhi Development Authority – that can revoke the sanction of land on grounds of violating its conditions (in which case the issue of what is to be done with the building standing on the land has to be dealt with).  

The baby declared dead when he was alive amounts to criminal negligence and is an unpardonable and punishable offence. In any country, the nurses and the doctors concerned would lose their license to practice their profession. Two doctors seem to have been suspended even as the Indian Medical Association is shamefully getting ready to protest against this action.

However, here too, the third reason cited for cancellation does not, regretfully, fall within the scope of the DNHA of 1953. It is the Medical Council of India (MCI) that is empowered to delicense and punish the errant doctors or hospitals guilty of negligence or malpractice. In other words, the DNHA does not confer any specific power on the supervising authorities to deal with medical malpractice as the West Bengal Clinical Establishment (Regulation and Transparency) Act of 2017 does. Under Section 33 (3) of the said Act, it empowers “The Commission may also order for cancellation of license, closure of the clinical establishment, forfeiture of establishment and property in case of grievous injury or death of the service recipient”. The DNHA does not have any such specific powers.

As such I do not agree that a negligent action by one doctor or a department resulting in death or grievious injury should entail cancellation and closure of a hospital that may contain 30 departments. This is because there is no country, no hospital and no doctor that may at some point of time or the other have not made errors in judgment. After all, medical science is not perfect and doctors are but human. The only course in such cases, that in India’s case are substantially high, is to severely punish the guilty and fine the establishments for poor oversight, while always keeping in hand the residual power to shut down a hospital in grave circumstances affecting public health. However, West Bengal’s Act and the Delhi government’s actions are reflective of the pathetic state of the MCI and its total failure to enforce ethical practice. The earlier our politicians recognise the real problem of setting the MCI right, the better.


No matter how compelling the reasons, governments cannot be guided by emotions of moral outrage and of right and wrong. A democratic society is founded on the basis of the rule of law that must guide government actions. This is so in order to avoid governments misusing their power, resorting to arbitrary action and ensuring fair play and natural justice. This then implies casting a special responsibility on the governments who are charged with the duty of providing good governance to its people. Having declared health as an industry working on the principle of return on investment and making profits over the welfare and well being of the patients, governments have a special duty to lay down laws, rules and regulations to stop providers and hospital establishments from getting away with predatory behavior or malpractice.

There is massive corruption in India’s health sector that no government seems able to or wants to address. The current obsession to privatise health, as if it is a commercial enterprise like Air India or a ITDC hotel, is not founded on the belief that patients will gain access to good quality of care. Instead it smacks more of an admission of governments’ inability to govern and enforce laws in order to ensure that in the name of quality, private hospitals do not play havoc with the vulnerable patients.

In light of the above, the recent action of the Delhi government cancelling the license of a hospital that has a history of wrong doing is highly commendable and praiseworthy in spirit but bad in law. If truly committed to patients well being, then it is incumbent on the government to come up with stringent laws that will not provide any scope to private players to be negligent, callous or exploitative.

K. Sujatha Rao is a former union secretary of the Ministry of Health and Family Welfare, government of India, and the author of Do We Care: India’s Health System.