Case at a Glance
A patient’s son filed a criminal complaint for cheating, criminal breach of trust and conspiracy against a hospital, its company and its Chairman, after the bill included Rs. 2,500 for an HRCT test that had not been done. The hospital had issued a revised bill and offered a refund within days. The Supreme Court held that the allegations, even taken at face value, disclosed no criminal offence — the billing error reflected inadvertence, not dishonest intent — and quashed the complaint, while leaving the complainant’s civil and statutory remedies open.
The complainant’s mother was admitted to Narayana Multispecialty Hospital, Barasat on 13 February 2021 for a fractured femur, underwent surgery on 15 February and was discharged on 19 February 2021. Of a bill of about Rs. 1,94,307.84, the complainant paid Rs. 1,71,130. The dispute centred on a Rs. 2,500 charge for an HRCT test which, the hospital said, had been proposed but not conducted. On 23-24 February 2021 the hospital issued a revised bill removing the charge and offered a refund by email.
The complainant nonetheless filed Complaint Case No. C-533 of 2021 before the Judicial Magistrate, Barasat, invoking Sections 406, 420 and 120B of the IPC and Section 34 of the West Bengal Clinical Establishments Act, 2017, and also alleging threats by hospital staff. On 11 March 2021 the Magistrate issued process against the accused, including the company and its Chairman. On 16 May 2023 the Calcutta High Court set aside the process order and remanded the matter for the Magistrate to assess the complicity of the company and the Chairman, who were outside the court’s territorial jurisdiction, while observing that an offence under Section 504 IPC was prima facie made out against two accused. The hospital and others appealed.
The Key Question Before the Court
Does a hospital billing error, promptly corrected with an offer of refund, disclose offences of cheating, criminal breach of trust, conspiracy or an offence under the West Bengal Clinical Establishments Act, 2017 justifying criminal prosecution?
Why the Complaint Failed Every Ingredient Test
Applying State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, the Court tested each offence. For criminal breach of trust, there was no entrustment, fiduciary obligation or dishonest misappropriation alleged, and the hospital had offered a refund once the error was pointed out. On cheating, the Court said: “We are of the opinion that the allegation of cheating is completely misplaced” — the billing error was inadvertence, not a dishonest inducement. Where the foundational offences are not disclosed, a charge of conspiracy premised on them ordinarily cannot stand, particularly with no prior agreement alleged. The allegations, the Court concluded, “fail to disclose the commission of any offence under the Sections invoked against the accused persons.”
On the 2017 State Act, the Court noted that grievances about billing and records are primarily addressed as deficiencies under Section 29 through the Act’s own civil and adjudicatory machinery, and that the complaint did not show how any offence under Section 34 had been committed: “Without even indicating as to how and in which manner the criminal offence has been committed, it is not permissible” to set the criminal law in motion. The Court referred to precedents including Ramesh Chandra Gupta v. State of UP, (2022) 18 SCC 706, Sadhupati Nageswara Rao v. State of Andhra Pradesh, (2012) 08 SC CK 0045, (2012) 8 SCC 547, Prof. R.K. Vijayasarathy v. Sudha Seetharam, (2019) 16 SCC 739, Joseph Salvaraj A. v. State of Gujarat, (2011) 07 SC CK 0010, (2011) 7 SCC 59 and Alpic Finance Ltd. v. P. Sadasivan, (2001) 02 SC CK 0059, (2001) 3 SCC 513.
What the Court Actually Held
- The complaint, taken at face value, discloses no offence under Sections 406, 420 or 120B IPC; the billing error showed inadvertence, not dishonest intent.
- The complaint did not indicate how any offence under Section 34 of the West Bengal Clinical Establishments Act, 2017 was committed; billing grievances lie primarily under the Act’s civil and adjudicatory mechanism.
- The appeals were allowed, the High Court’s order set aside, and Complaint Case No. C-533 of 2021 quashed.
- Quashing “will have no bearing on the civil or statutory remedies that the complainant may exercise in accordance with law.”
Why This Judgment Matters
- It guards hospitals and their senior management against criminal prosecution over billing disputes that are essentially civil or regulatory.
- It restates that cheating requires dishonest intent at inception, and breach of trust requires entrustment.
- It points patients towards the appropriate remedies — the Clinical Establishments Act machinery and civil/consumer remedies.
What Should Advocates Take Away From the Judgment?
For Patients
- Billing grievances against hospitals should ordinarily be pursued under the clinical establishments law or through civil/consumer remedies, not criminal complaints.
- Your civil and statutory remedies survive even when a criminal complaint is quashed.
For Counsel
- Seek quashing under Bhajan Lal where a commercial or billing dispute is dressed up as cheating or breach of trust.
- Prompt correction and an offer of refund are strong indicators of inadvertence rather than dishonest intent.
- Where a special State law provides adjudicatory remedies, show that the complaint does not disclose the penal ingredients of that law.
Key Takeaways
- A corrected billing error is not cheating.
- No entrustment, no criminal breach of trust.
- Conspiracy falls with the foundational offences.
- Civil and statutory remedies remain open to the patient.
Frequently Asked Questions
Can a hospital be criminally prosecuted for overbilling?
Only if the ingredients of an offence such as cheating or criminal breach of trust are disclosed. Here, a Rs. 2,500 charge removed with an offer of refund was held to be inadvertence, and the complaint was quashed.
What remedy does a patient have for a wrong hospital bill?
The Court noted that billing and records grievances are primarily addressed under the West Bengal Clinical Establishments Act’s civil and adjudicatory provisions, and preserved the complainant’s civil and statutory remedies.
Why was the Chairman’s prosecution also ended?
Because the Supreme Court quashed the entire complaint, finding that it disclosed no offence against any of the accused under the provisions invoked.
Conclusion
Narayana Health v. State of West Bengal, (2026) 05 SC CK 0432 is a clear reminder that the criminal law is not a substitute for civil or regulatory remedies. A billing slip that the hospital corrected within days could not support a prosecution of the company and its Chairman for cheating and conspiracy.
Practical takeaway: For disputed hospital bills, use the regulatory and civil route; a criminal complaint must plead the specific dishonest intent and entrustment the offences require.
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