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In a recent decision, the Kerala High Court quashed a Government Order, which brought down rates of RT-PCR test from Rs.1700 to Rs. 500 at private hospitals.

The Court was hearing a writ petitions by Diagnostic Laboratories and Research Centres in Kerala, who were conducting various kinds of Covid-19 tests, including RT-PCR tests.

The writ petition were filed to quash order dated 08.02.2021 and order dated 30.04.2021, whereby the State had re-fixed the rates of RT-PCR tests chargeable by the private Laboratories in Kerala. The petition also sought quashing of order dated 01.05.2021 issued by the State purported to be under Section 20 read with Sections 24 & 65 of the Disaster Management Act, 2005, passed to ensure strict adherence to the prescribed rates for RTPCR tests as revised from time to time by the State.

The petitioners contended that the Government made the decision without taking the view of private laboratories as was necessitated by the Supreme Court on 08.04.2020. The Petitioners also contended that the State had no power to issue an order fixing rate for tests in private labs. The order was violative of jurisdiction and principle of natural justice. The Petition further contended that the making cost of RT-PCR test were Rs.1500, any rate below that would affect the profit and quality of the test.

The State had contended that price fixation/revision of the rates for RT-PCR test is a legislative function. This legislative action does not warrant the application of the principles of natural justice and the Court may not exercise the jurisdiction under Article 226 in cases of this nature. It is further contended, the State is empowered under Article 162 along with Section 72 of the Disaster Management Act, 2005, which provides that the said Act shall have an overriding effect over the provisions of any other law for the time being in force. Further, the State has powers under Epidemic Diseases Act, 1897, and the Public Health Ordinance, 2021, for the State to fix the rates for RT-PCR test. The State had also contended that there are several states like Punjab & Haryana and Maharashtra who aare conducting RT-PCR for costs below Rs.500.

The Kerala High Court bench of Justice T.R. Ravi set aside the order of the State Gvernment stating that when the price is fixed, as a result of the directions issued by the ICMR pursuant to a judgment of the Hon'ble Supreme Court, necessarily, the State was obliged to discuss the matter with private laboratories. The Court further observed that the argument of prices in other states does not hold because there is no material either before the Government or before the Court to ascertain how the prices were arrived at in the said States. Thus  Justice Ravi concluded that the GO is to be set aside and the State Government should take a fresh decision regarding the rate at which the RT-PCR should be conducted after discussing the issue with the private laboratories.

Case Title: Accredited Molecular Testing Laboratories v. State of Kerala

Access Copy of Order Here