Criminal Proceedings Against Hospitals Cannot Continue When Allegations Disclose Only Billing Disputes or Service Deficiencies Without Ingredients of Cheating or Criminal Breach of Trust
Case Name: Narayana Health & Ors. v. The State of West Bengal & Ors.
Citation: 2026 INSC 481
Date of Judgment/Order: 12 May 2026
Bench: Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe
Held: The Supreme Court held that criminal proceedings cannot be sustained against a hospital and its officials merely on the basis of allegations relating to billing discrepancies, refund disputes, or delay in supply of medical records unless the foundational ingredients of criminal offences are clearly disclosed. The Court held that offences under Sections 405, 420 and 120B IPC require specific allegations showing entrustment, dishonest intention from inception, or prior agreement to commit an illegal act, none of which were made out in the complaint. The Court further held that grievances relating to hospital billing, treatment records, and service deficiencies are primarily matters governed by the West Bengal Clinical Establishments (Registration, Regulation and Transparency) Act, 2017, which provides statutory remedial mechanisms, and such disputes cannot be converted into criminal prosecutions by merely invoking penal provisions without factual foundation.
Summary: The proceedings arose from a complaint filed by the son of a patient treated at Narayana Multispecialty Hospital, Barasat, Kolkata, for a fractured femur. After discharge, the complainant alleged discrepancies in billing and sought medical records required for insurance reimbursement. The hospital later issued a revised bill correcting a charge of INR 2,500 relating to an HRCT test that had not ultimately been conducted and offered to refund the amount. Dissatisfied, the complainant filed a criminal complaint alleging offences under Sections 406, 420 and 120B IPC along with Section 34 of the West Bengal Clinical Establishments Act against the hospital company, its Chairman, employees and hospital representatives. The Magistrate issued process, and the High Court, while setting aside the summoning order on territorial jurisdiction concerns, nevertheless observed that offences appeared to be made out, including a possible offence under Section 504 IPC based on alleged threatening remarks by hospital staff. The Supreme Court extensively examined the ingredients of criminal breach of trust, cheating and criminal conspiracy and found that the allegations disclosed at best a service-related grievance involving billing adjustment and supply of records. The Court observed that the hospital had already acknowledged the billing discrepancy and offered refund, negating any inference of dishonest intention or criminal design.
Decision: The Supreme Court allowed the appeals, set aside the Calcutta High Court’s judgment dated 16 May 2023 in C.R.R. No. 967 of 2021, and quashed Complaint Case No. C-533 of 2021 pending before the Judicial Magistrate, 2nd Court, Barasat. The Court held that the complaint, even if accepted entirely at face value, did not disclose commission of any criminal offence under the IPC or Section 34 of the West Bengal Clinical Establishments Act. The Court further clarified that while the complainant may pursue civil remedies or statutory remedies under the 2017 Act concerning billing or medical record grievances, criminal law could not be invoked in the absence of essential ingredients constituting the alleged offences. The Court also recorded appreciation for the assistance rendered by the amicus curiae.