Holding

The Punjab Government's 1995 policy restricting medical reimbursement to rates fixed by the Director is a valid exercise of its power and does not violate Articles 21 or 47 of the Constitution.

Summary

Ram Lubhaya Bagga, a Punjab government employee, suffered a heart attack and was treated at Escorts Heart Institute, incurring Rs. 2,11,758.70 in expenses. He claimed full reimbursement under the 1991 policy that allowed full payment at designated private hospitals, but the Punjab Government had issued a new 1995 policy limiting reimbursement to rates fixed by the Director of Health and Family Welfare (AIIMS rates) or actual cost, whichever was lower. The High Court ordered full reimbursement, which the State appealed. The Supreme Court held that a State may modify its policies in response to changing circumstances and financial constraints, and such modification is not arbitrary nor violative of Articles 21 or 47 of the Constitution. The Court emphasized that fundamental rights are not absolute and may be reasonably restricted in a welfare State. Consequently, the 1995 policy was upheld and the High Court order set aside, with some appeals allowed and others dismissed.

Issues considered

The State's change in reimbursement policy violates Article 21 (right to life) and Article 47 (right to health).
Whether the State has the authority to modify its medical reimbursement policy and if such modification is subject to judicial review.
Whether the new policy is arbitrary or unreasonable in light of constitutional guarantees.

Legislation cited

Constitution of Indias. Article 21, s. Article 41, s. Article 47

Subjects

administrative lawpolicy changejudicial reviewright to healthArticle 21Article 47financial constraintsmedical reimbursementwelfare statefundamental rights

Judgment

A STATE OF PUNJAB AND ORS.
v.
RAM LUBHAYA BAGGA

FEBRUARY 26, 1998

B [S.B. MAJMUDAR, M. JAGANNADHA RAO AND A.P. MISRA, JJ.]

Administrative Law :

Administrative action-Policy-Change of-State Government changed
C its policy as regards reimbursement of medical expenses-Validity of-Held
: Right of the State to change its policy from time to time under the changing
circumstances cannot be challenged-In the circumstances of the case, change
of policy upheld.

Judicial review-Policy Scrunity of-Held: Policy cannot be scrutinised
D though the court can determine whether it is arbitrary or violative of any
constitutional, statutory or any other provision of law.

Po/icy-Framing of-Financial constraint;;-Held: Essential
consideration for forming or modifj;ing a policy.

E Constitution of India, 1950 :

Articles 21, 41 and 47-Right to health-State G_overnment restricted
reimbursement of medical expenses to its employees-Validity of-Held: It is
the obligation of the State to secure the health of its citizens-But Government
F is justified in restricting the medical facilities to the extent its fina'lces
permit-Hence, decision of State Government not violative of Art. 21.

Articles 21 and 47-Right to health-Obligation of the State to
streamline its health services emphasised.

Part ///-Fundamental rights-Held: Not every fundamental right is
G absolute-Every individual right has to give way to the right of the public
at large.

Jurisprudence-Jura! Relations-Right-Duty correlative-Held: Right
of one is an obligation of the another.

H The respondent suffered a heart attack and was admitted to the
1120
STATE v. R.L. BAGGA 1121
Escorts Heart Institute and Research Centre for treatment The respondent A
submitted a bill to the appellant-State for full reimbursement of his medical
expenses. The appellant-State allowed the respondent's claim in part on the
ground that as per the new policy framed in 1995, reimbursement of medical
expenses was restricted to the level of expenditure as per the rate fixed by
the Director, Health and Family Welfare for a similar treatment package or B
actual expenditure whichever was less.

Being aggrieved the respondent filed a writ petition before the
High Court The High Court allowed the petition and held that the respondent
was entitled to total reimbursement of his medical expenses incurred in a
private hospital. Hence this appeal. C

On behalf of the respondent it was contended that according to the
1991 policy reimbursement of full medical expenses charged by certain
designated private hospitals like, Escorts, Apollo etc. were admissible and,
therefore, the new policy denying full reimbursement of medical expenses
incurred in a private hospital was not justified; that this Court in Surjit D
;.. Singh 's case had upheld reimbursement of medical expenses at Escorts and,
therefore, it was not permissible for the appellant-State to change its policy;
and that the new policy; of the appellant framed in 1995 was violative of
Article 21 of the Constitution.

Disposing of the appeal, this Court E
HELD : 1. The right of the State to change its policy from time to time,
under the changing circumstances is neither challenged nor could it be.
[1133-CJ
2. It is not normally within the domain of any court, to weigh the pros
and cons of the policy or to scrutinise it and test the degree of it is beneficial F
or equitable disposition for the purpose of varying, modifying or annulling
it, based on howsoever sound and good reasoning, except where it is arbitrary
or violative of any constitutional, statutory or any other provision of law-
When Government forms its policy, it is based on a number of circumstances
on facts, law including constraints based on its resources. It is also based G
on expert opinion. It would be dangerous if court is asked to test the utility,
beneficial effect of the policy or its appraisal based on facts s.et out on
affidavits. The court would dissuade itself from entering into this realm
which belongs to the executive. It is within this matrix that it is to be seen
whether the new policy violates Article 21 when it restricts reimbursement
on account of its financial constraints. [1134-A-C] H
1122 SUPREME COURT REPORTS [1998) 1 S.C.R.

A 3. Right of on~person correlates to a duty upon another, indh·idual,
employer, Gonmment or authority. The right of one is an obligation of
another. Hence the right of a citizen to lh·e under Article 21 casts obligation ..,.
on the State. This obligation is further reinforced under Article 47. It is for
the State to secure the health of its citizens as its primary duty. No doubt
B go\"Crnment is rendering this obligation by opening Gonrnment hospitals
and health centres, but in order to make it meaningful, it has to be within
the reach of its people, as far as possible, to reduce the queue of waiting lists,
and it has to provide all facilities for which :.II employee looks for at another
hospital. Its up-keep, maintenance and cleanliness have to be beyond aspcrsioIL
To employ the best of talents and tone up its administration to giw effecth-e
C contribution. Also bring in awareness in welfare of hospital staff for their
dedicated senice, giYe them periodical, medic~thical and senrice oriented
training:, not only at the entry point but also during the \lhole tenure of their
scnice. Since it is one of the most sacrosanct and valuable rights of a citizen
and equally sacrosanct sacred obligation of the State, enry citizen of this
welfare State looks towards the State for it to perform this obligation with
D top priorify including by way of allocation of sufficient funds. These in turn
TI•ill not only secure the right of its citizen to the best of their satisfaction
but in tum will benefit the State in achieving its social, political and
economical goal For e1-·ery return there has to he an investment. Investment
needs resources and finances. So e\"Cn to protect this sacrosanct right
finances are an inherent requirement Ilarmonising such resources needs
E top priority. (llJ.1-D-H)

_ 4. The State can neither urge nor say that it bas no obligation to
pro•ide medical facility. If that were so it would be ex facie violath·e of Article
21. Under the new policy medical facility continues to be given and now an
employee is given free choice to get treatment in any private bos11ital in India
F but the amount of payment towards reimbursement is regulated. Without
fixing any sj1ecific rate, the new policy refers to the obligation of paying of
the rate fixed by the Director. The new policy does not lea\·e this fixation to
the sweet will of the Director but it is to be done by a Committee of technical
experts. [1135-A-C] · /

G 5.1 No State or any country can have unlimited resources to spend
on any of its project. That is why it only appro.-es its projects to the extent
- -is feasible. The same holds good for pro\iding medical facilities to its citizen
including its employees. Provision of facilities cannot be unlimited. It bas to
be to the extent finances permit. If no scale or rate were fixed then in case •
private clinics or hospitals increase their rate to exorbitant scales, the State
H would be bound to reimburse the same. Hence the principle of fixation of rate
STA TE v. R.L. BAGGA 1123

and scale under the new policy is justified and cannot be held to he violative A
of Article 21 or Article 47 of the Constitution of India. (1135-E-FJ

5.2 Answer to the que~1ion whether the modification of the policy by
the State by deleting its earlier decision of permitting reimbursement at the
Escort and other designated hospitals' rate is justified or not will depend on
the facts and circum~1ances. This Com1 would not interfere with any opinion B
formed by the Government if it is based on relevant facts and circumstances
or based on expert advice. [1135-H; 1136-AJ

6. Any State endeavour for giving best possible health facility has
direct co-relation with finances. Every State for discharging its obligations C
to provide some projects to its subjects requires finances. Article 41 of the
Constitution gives recognition to this aspect. [1136-B-CJ

7. The appellants have explained that earlier under the 1991 policy,
bulk of the State's budget was being taken by few elite for such treatment
like Heart ailment etc. to the detriment of a large number of other employees D
who suffered. Hence, the facility of reimbursement of full charges at
designated hospitals was withdrawn even under the old policy Therefore, it
has to he held that the appellant's decision to exclude the designated hospitals
is not violative of Article 21 of the Constitution. [1136-D-EJ

8. No right can be absolute in a welfare State. A man is a social E
animal. He cannot live \lithout the cooperation of a large number of persons.
Every a11icle one uses is the contribution of many. Hence every individual
right has to give way to the right of public at large. No fundamental right
under Part m of the Constitution is absolute and it is to be within permissible
reasonable restriction. This principle equally applies when there is the
constraint on the health budget on account of financial stringency. It is, F
however, hoped that Government will give due consideration and 11riority in
the health budget in future and render what is best possible. [1137-C-D)

9. For the aforesaid reasons and findings the State Government's new
11olicy date 13-2-1995 is upheld. It is further held that the new policy is not G
violative of Article 21 of the Constitution. [1137-E)

Surjit Singh v. State of Punjab, [1996)2 SCC 336 and State of Punjab
v. Mahinder Singh Chawla, [1997) 2 SCC 83, held inapplicable.

Vincent Panikurlangara v. Union of India, [1987) 2 SCC; Kir/oskar H
1124 SUPREME COURT REPORTS [1998] l S.C.R.

A Brothers Ltd. v. Employees State insurance Corporation, [1996] 2 SCC 682;
' Banga Khet Mazdoor Samity v. State of West Bengal, [1996) 4 SCC
Paschim
36 and Varian Singh v. State of Punjab, (1996) 4SLR177, relied on.

CIVIL APPELLATE JURISIDCTON: Civi1Appea!Nos. llll-1115of
1998Etc.
B
From the Judgment and Order dated 21.3.97/8.5.97/5.7.%./10.7.96/10.10.96
of the Punjab and Haryana High Court in CWP Nos. 13872/96, 402/97, 224/
96, 9655/96, 12637/96.

Dr. Rajiv Dhawan and R.S. Sodhi for the Appellants.
c
O.P. Sharma, K.G. Bhagat, Vineet Bhagat, Kamal Baid, See~i Bagga, Ms.
Tanuj Sharma, Ms. Shurestha Bagga, A. V. Palli, Atul Sharma, Ms. Rekha Palli,
K.R. Gupta and Ms. Nanita Sharma for the Respondents.

The Judgment of the Court was delivered by
D
MISRA, J. Leave granted.

In these set of appeals arising out of Special leave petitions, the common
question which has come up for consideration is the entitlement towards
medical expenses of the Punjab Government employees and pensioners as per
E the relevant rules and the Government policy. In pith and substance, the scale
at which their reimbursement is admissible towards their medical expenses
incurred in a non-governmental hospital. It is not a new phenomena, such
employees have been and are still raising such issue repeatedly with the
change of government policy. With the changing scenario, political, social
F and financial the policy of reimbursement is not static. In the recent past in
spate of petitions dealing with the 1991 policy of the State GoYernment this
Court settled this principle in the case of Surjit Singh v. State of Punjab &
Ors., [1996] 2 SCC 336 and State ofPunjab v. Mahinder Singh Chawla, [1997]
2 SCC 83. Consequent to the effect of the said and other decisions and their
resultant impact on the State exchequer and other factors led the State
G Government to reconsider its old policy of 1991 by making necessary
modifications, deletions through order dated 9.9.94 till it was substituted
through a new policy dated 13th February, 1995. All the earlier rulings were
based on the aforesaid old policy including the clarification dated 8th October,
199 l. The same was partially withdrawn on 9th September, 1994 followed by
H placing the new policy on 13th February, 1995. In short respondents grievance,
STATE v. R.L. BAGGA [MISRA, J.] 1125
is the claim which was allowed by t11is Court earlier when such employees A
were admitted for heart ailment in Escorts a non-governmental hospital, is
now being declined which is in contradiction to t11e said mlings of this Court.

In short in SLP (C) No. 13167 respondent is said to have suffered a
severe heart attack on 13th March, 1995 and was taken to the Escorts Heart B
Institute and Research Center in an emergency. On 27111 March he underwent
coronary artery bypass graft surgery. Finally he was discharged on 10th April,
1995. The entire ex')Jenses incurred for the treatment, surgery, post-operative
c!J.eck up etc. came to Rs. 2,11,758.70. In May, 1996 he has submitted the bill
to t11e government for reimbursement.
c
The appellant's stand is that as per new policy dated 13th Febmary,
1995 the reimbursement of t11e medical expenses incurred in any private
hospital is only admissible, if for such ailment, treatment is not available in
any government hospital, and for this no objection certificate is obtained from
the Civil Surgeon or Director of Health Services as the case may be.
Respondent's case was not referred to the Escorts for any treatment by any D
of the competent authority. For any such claim an employee must obtain no
objection certificate from tl1e concerned authority. In cases of emergency if
admitted in a private hospital ex-post facto approval could be obtajned from
the concerned authority of course within the permissible parameters. As the
claim relates to surgery conducted after fue new policy and the reimbursement E
amount is claimed on the basis of t11e bill of the Escorts, fue same is,
according to appellant not permissible in as much as t11e Committee of
Technical Experts has decided as per t11e new policy that only rates as
prevalent in All India Institute of Medical Sciences, New Delhi, will be paid.

The respondents witll:· vehemence challenge fuis stand and fue new F
" policy of the appellant which has come into force on 13.2.95 as t11e same being
violative of Article 21 of t11c Constitution of India. It is argued t11is is one of
fue most sacred fundamental rights given to its citizen. Since right to life is
protected under this Article hence refusing to pay tlle amount spent to save
one's life amounts to t11e curtailment of such right, hence violative of Article G
21. In earlier decisions this Court has said tllat t11e right to live does not mean
·"'- mere survival or animal existence but includes the right to live with Human
dignity. In other words, man's Life should be meaningful, wort11 Iiving. Pit11
and substance of life is tlle healtll, which is the nucleus of all activities of
life including that of an employee or other viz. tlle physical, social, spiritual
or any conceivable human activities. If this is denied, it is said everyt11ing H
1126 SUPREME COURT REPORTS [1998] l S. C.R.
,
A crumbles.
This Court has time and again emphasised to the Government and
other authorities for focussing and giving priority to the heal!h of its, citizen,
which not only makes one's life meaningful, improves one's efficiency, but in
tum gives optimum out put. Further to secure protection of one's life is one
B of the foremost obligation of the State, it is not merely a right enshrined under
Article 21 but an obligation cast on the State to provide this both under
Article 21 and under Article 47 of the Constitution. The obligation includes
improvement of public health as its primary duty. Learned counsel for the
appellant on the other hand does not deny such a right but urges that the
C san1e can be placed within permissible limits by rules and policies laid down.
The right claimed may be sacrosanct, which has to be given, but the same
can be put within reasonable limits, under a policy which is framed after taking
into consideration various factors. Thus the only question is, whether the
new policy is arbitrary, unreasonable violative of any law or principle to be
struck down. Of course it has to stand to the test of reasonableness and not
D to erode or curtail any of the Constitutional or Statutory right of any employee
If not, the claim cannot go beyond the policy.

Shri Rajeev Dhawan, learned senior counsel appearing for the appellants
submits with force that it would be no violation, if medical facility in absolute
term as desired is not provided because of any financial constraints viz. lack
E of financial resources or for such other reasons. No right under the Constitution
is absolute in term. It has to be balanced with the need, equity and the
resources available. In Vincent Panikurlangara v. Union of India,. [1987] 2
sec 165;
"Para 16 - In a series of pronouncement during the recent years this
F court has called out from the provisions of part IV of the Constitution \-
these several obligations of the State and called upon it to effectuate
them in order that the resultant pictured by the Constitution Fathers
may become a reality. As pointed out by us, maintenance and
improvement of public health have to rank high as these are
G indispensable to the very physical existence of the community and on
the betterment of these depends the building of the society of which
the Constitution makers envisages. Attending to public health, in our A
opinion, therefore, is of high priority - perhaps the one at the top."

·"The expression 'life' assured in Article 21 does not connote mere
H animal existence or continued drudgery through life. It has a much
STATE v. R.L. BAGGA [MISRA, J.] 1127
wider meaning which includes right to livelihood, better standard of A
living, hygienic conditions in the workplace and leisure facilities and
opportunities to eliminate sickness and physical disability of the
workmen. Health of the workman enables him to e11joy the fruits of his
labour, to keep him physically fit and human right to protect his
health. In tliat case health insurance, while in service or after retirement B
was held to be a fundamental right and even private industries are
enjoined to provide health insurance to the workmen."

In Kirloskar Brothers Ltd. v. Employees State Insurance Corporation,
[1996] 2 sec 682;
"Para 9 - The Constitution envisages the establishment of a welfare C
State at the federal level as well as at the State level. In a welfare State
the primary duty of the Government is to secure the welfare of the
people. Providing adequate medical facilities for the people is an
essential part of the obligations undertaken by t11e Government in a
welfare State. The Government discharges this obligation by running
hospitals and health centers which provide medical care to the person D
seeking to avail of those facilities. Article 21 imposes an obligation on
the State to safeguard the right to life of every person. Preservation
of human life is thus of paramount importance. TI1e government
hospitals run by the State and the medical officers employed therein
are duty bound to extend medical assistance for preserving human E
life. Failure on the part of a government hospital to provide timely
medical treatment to a person in need of such treatment results in
violation of his right to life guaranteed under Article 21."

In Paschim Banga Khet Mazdoor Samity v. State of West Bengal,
[J 996J 4 sec 36; F
"Para 16- It is no doubt true that financial resources are needed for
providing t11ese facilities. But at the same time it cannot be iguored
that it is the constitutional obligation of t11e State to provide adequate
medical services to t11e people. Whatever is necessary for this pwpose
has to be done. In the context of the constitutional obligation to G
A provide free legal aid to a poor accused this Court has held that the
State cannot avoid its constitutional obligation in that regard on
account of financial constraints. The said observations would apply
with equal, if not greater, force in the· matter of discharge of
constitutional obligation of the State has to be kept in view." H
1128 SUPREME COURT REPORTS [1998] l S.C.R.

A On the basis of last decision reference to above, the question is,
whether such a right is absolute and no financial constraints cou!d be pleaded
or if it could be, to what extent? This we would be adverting little later.

Learned counsel for the appellants fairly submits that in respect of any
such claim of reimbursement for a period prior to the new policy, the old
B policy of 1991 as modified before the new policy would be applicable. so far
as the old policy goes the law is well settled through various decisions of
this Court about which there is not much dispute.

Before proceeding further we would like to refer to a preliminary objection
C raised by learned counsel for the respondent that under this new policy when
the State Government denied such claim of an employee in circumstances
similar to the present case, tl1e said employee filed a writ petition which was
allowed by the High Court in the case of Varian Singh v. State of Punjab,
(l 996) 4 SLR 177 against tllat judgment tl1e State filed SLP (C) No. 12954 of
1996 and it was dismissed by tl1is Court on l 7tll December, 1996. Hence it is
D contended for the respondent tllat tl1e State cam10t take up the same stand
which has become final. We are informed and it is not disputed that the said
dismissal of the SLP was not by any reasoned order. Points raised here before
us was neither raised nor decided in tl1at SLP by this Court. As this question
is likely to come in future, we feel it is necessary to decide and settle it. Hence
this preliminary objection raised by tlle respondent has no force.
E
The validity of the claim of the respondents has been upheld by the
High Court under the impugned order and the which respondent has been
held entitled to total reimbursement of his expenses incurred in a private
hospital. To appreciate all this it is necessary to shortly give the periphery
F of tlle earlier policy of 1991 and the new policy dated 13th February, 1995.

The old policy of 1991 was framed in supersession of the earlier Punjab
Govermnent's letter dated 27tll May, 1987. Tilis is a policy for the reimbursement
of the medical expenses incurred on treatment taken abroad or in a hospital
other than the hospitals of the Government of Punjab (both outside and in
G the State of Punjab). Relevant portion of the same is quoted hereunder:

"The person who is in need of medical treatment outside India or in A

any hospital other than the Govt. of Punjab (both outside and in the
State of Punjab) as tl1e case may be may make an application for
getting treatment in these hospitals directly to the Director, Health
H and Fanlily Welfare, 2 montlls in advance, duly recommended by the
STATEv. R.L. BAGGA [MISRA, J.] 1129
CMO/Medical Superintendent indicating that the treatment for the A
disease mentioned is not available in the hospital of the Government
of Punjab. In case of emergency duly authenticated by CMO/Medical
Superintendent the application can be made 15 days in advance.

Director, Health and Family Welfare, Punjab will place the application
of the employee concerned before the Medical Board within 15 days B
on the receipt of application. In case of emergency, if immediate
meeting of Medical Board cannot be convened, such application may
be circulated to all the members of the Medical Board and decision
taken thereof.

Thereafter on 8th October, 1991, the policy was further clarified so far C
as the choice of hospitals is concerned which is also quoted hereunder:-

"Policy for reimbursement of medical expenses incurred on medical
treatment taken abroad and in hospitals other than those of the
Government of Punjab, both within and outside the State was laid D
down. However, as per the 12th item of these instructions, a list of
f those diseases for which specialised treatment was not available in
the government hospitals was to be prepared in addition to identifying
medical institutions/hospitals/clinics of repute where such specialised
treatment was available. Open Heart Surgery; Escorts heart Institute,
New Delhi; Christian medical College, Ludhiana; Apollo Hospital, E
Madras."

We find two significant points in the said policy, one the procedural and
the other nominating few designated hospitals other than government hospital
for treatment. The procedure laid down under this was very onerous, some
times not workable, specially in emergency cases. Under it if one needs F
..,_ medical treatment either outside India or in any hospital other than the
Hospital of Government of Punjab, an application seeking approval for such
treatment in such hospital has to be made to the Director of Health and Family
Welfare two months in advance duly recommended by CMO/Medical
Superintendent indicating that the treatment for such disease is not available G
in the hospital of the Government of Punjab. In cases of emergency such
application is to the authenticated by CMO/MS to be made fifteen days in
advance. It is tl1is procedure which deprived persons from getting prompt and
better treatment at other places. Some of the serious diseases do not knock
or warn through bell giving them time. Emergency cases require immediate
treatment and if with a view to comply with procedure one has to wait then H
Jl3f\ SUPREME COURT REPORTS [1998] 1 S.C.R

A it could be fatal. One may not in such cases live, if such a procedure is strictly
followed. It seems keeping this in light, the Government in 1991 modified its
policies by including Escorts Heart Institute, New Delhi; Christian Medical
College, Ludhiana and Appollo Hospital, Madras, in case of Open Heart
Surgery as the designated hospitals for treatment of such permissible diseases.
Government in its 1991 policy, also reserved its right to revise the list in
B future. The listing of the aforesaid designated hospitals was with the approval
of the Finance Department. Thereafter on 9th September, 1994 on the advice
of the Finance Department the aforesaid 1991 policy was again modified by
withdrawing the clarification dated 8th October, 1991 wherein private hospitals
in the State and outside were recognised for treatment. Hence the benefit of
C the designated hospitals was no longer available to an employee for being
reimbursed towards his medical ex")lenses. it is in this background present that
the new policy dated 5th October, 1995 bas come in to force. The relevant
portion of the Said State Policy is reproduced below:-"

"As per instructions issued vide Punjab Government letter No. 1n1ss
D - SHBV/2498, dated 25.1.1991 the policy regarding reimbursement of
m'edical emphases incurred on medical treatment taken abroad and in
hospitals other than the hospitals of the Government of Punjab (both
outside and inside the State of Punjab) was laid down. The Government
has reviewed the decisions taken in the aforesaid letter and it bas now
been decided as under:-
E
TRE4TMENT AT AILHS

District Civil Surgeons shall be competent to permit treatment of
a particular disease at AIIMS, New Delhi on the basis of
recommendations of the District level Standing Medical Board provided
F the treatment is not available in the Government Hospitals of the
State.

The expenditure on reimbursable items on such a treatment in AIIMS,
New Delhi, shall be reimbu.-sed to Government employees/pensioners.
,.
G TREATMENT LV PRIVA1E HOSPITALS IN THE COUNTRY

It has been decided that employees and pensioners should be
given freedom to get treatment if any, private institute/hospital (of
their own' choice), in the country provided that he/she gives an
undertaking out of his/her free will and in an unambiguous ternts that •
H he/she will accept reimbursement of expenses incurred by him/her on
STATE v. R.L. BAGGA [MISRA, J.) 1131
his/her treatment to the level of expenditure as per rates fixed by t11e A
Director, Health and Family Welfare, Punjab for a similar treatment
package or actual ex'Penditure whichever is less. The rate for a particular
treatment would be included in tl1e advice issued by the District/State
medical Board. A Committee of technical experts shall be constituted
by the Director Healt11 and Family Welfare Punjab to finalise tlle rates B
of various treatment packages and the same rate list shall be made
available in tlle offices of tlle Civil Surgeons of the State.

However, t11is pem1ission would be granted by tlle Director, Healtll
and Family Welfare, Punjab on tlle advice of State medical Board in
ca5e of treatment in Private Hospitals outside tlle State and tlle District C
Medical Board in case of treatment in private hospitals within tlle
State.

It is further submitted tllat in an emergent case prior pem1ission
could be waived from tlle Medical Board but Ex-post facto approval
from tlle Medical Board for reimbursement of medical ex'Penses is D
absolutely essential in accordance with the instructions dated
5.10.1995.

TREATMENT ABROAD

The treatment of a disease in a country abroad would be permitted E
in extremely rare cases where satisfactory treatment is not available in
tlle country. Such treatment and follow up shoul!l be recoll11l1ended by
tlle State Medical Board. Prior approval of tlle State Medical Board
shall be a pre-requisite in such cases. All efforts should be made by
tlle concerned employee/pensioner to take prior approval of tlle State F
Medical Board."

Learned counsel for the respondents strongly relies on tlle case of
Surjit Singh, (supra). The contention is tllat in tllat case tlle claim for getting
reimbursement expenses incurred in Escorts was upheld and hence it would
be impermissible now for the State Government to deny reimbursement of G
expenses incurred at Escorts on tlle basis of tlle alleged new policy. The
"' decision under tlle new policy to reimburse expenses only on the basis of tlle
rates at tlle AIIMS, it is contended illegal. Everyone in order to protect his
life has to go wherever best possible treatment is available. If respondent
went to Escorts which was once a designated hospital, the refusal now to H
1132 SUPREME COURT REPORTS [1998) I S.C.R

A reimburse expenses incurred at Escort has no justifiable ground to stand.

Having heard learned counsel for the parties at length, we find the Surjit
Singh 's, case admittedly was based on the old policy. There the medical
r
reimbursement claim, was admissible at the rate admissible in Escort's, as
Escorts' s was one of the designated hospitals. In that case denial of such rate
B was therefore rightly rejected. However, strong reliance has been placed by
the resp~ndent on the following paragraphs of Surjit Singh v. State ofPunjab,
[1996) 2 sec 336 which is as under:

"Para 9 -111e Policy, providing recognition for treatment of open .

heart surgery in the Escorts, specifically came to be examined by a
c Division bench of the Punjab and Haryana High Court at Chandigarh
titled as Sadhu R. Pai/v.Slakef!1Wv"oll. (1994) I SLR 283 (P & H)
wherein the claim of the then writ petitioner to medical reimbursement
was accepted when in order to save his life he had got himself
operated upon in the Escorts, and the plea oi the State that he could
D be paid rates as prevalent in the AlllvlS \Vas rejected. special leave
Petition No. 22024 of 1995 against the said decision was dismissed by
this Court on 2.2.94."

"Para 12- The appellant therefore had the right to take steps in r
self"Prescrvation. He did not have to Sta.'ld in queue before the Medical
E Board, the manning and assembling of which, barefacedly, makes its
meetings difficult to happen. The appellant also did not have to stand
in qu~ue in the government hospital of AllMS and conld go elsewhere
to an alternative hospital as per policy."

Same argument is submitted for drawing parity with the said case. Here
F also it is urged, when one gets heart attack he has to wait in a long queue,
in the government hospital and may be by the time his tum comes he may
not survive. it is hence argued that the medical facility.provided would be
futile.

As aforesaid the said decision would render no assistance to the
G respondents. Under the old policy there were designated hospital including
Escorts. That was the foundation of the Said decision. Relevant portion in
this regard is quoted hereunder:-

"When the State itself has brought Escorts on the recognised list, it
H is futile for it to contend that the appellant could in no event have
STATE v. R.L. BAGGA [MISRA, J.] 1133

gone to Escorts and his claim cannot on that basis be allowed, on A
suppositions. We think to the contrary. In tile facts and circumstances,

- had the appellant remained in India, he could have gone to Escorts
like many others did, to save his life." Surjit Singh 's, case (Supra).

That was a case where the petitioner got heart attack being in England
and was hospitalised and operated in Burminghom hospital and this Court B
held that is as much as Escort was one of tile designated hospital under tile
old policy of tile reimbursement permissible to the appellant would be at the
rate as that of Escorts and not of AIIMS as ordered by the State.

The right of the State to change its policy from time to time, under tile
changing circumstances is neit11er challenged nor could it be. Let us now C
examine this new policy. Learned senior counsel for tile appellants submits
that tile new policy is more liberal in as much as it gives freedom of choice
to every employee to undertake treatment in any private hospital of his own
choice any where in tile country. The only clog is that tile reimbursement
would be to tile level of expenditure as per rates which are fixed by tile D
t Director, Health and Family Welfare, Punjab for a similar package treatment or
actual eiqienditure which ever is less. Such rate for a particular treatment will
be included in t11e advice issued by tile District/State Medical Board for fixing
this. Under tile said policy a Committee of Technical Experts is constituted
by t11e Director to finalize the rates of various treatment packages and such
rate list shall be made available to tile offices of tile Civil surgeons of tile E
State. Under this new policy, it is clear that none has to wait in a queue. One
can avail and go to any private hospital anywhere in India. Hence tile objection
that, even under t11e new policy in emergency one has to wait in a queue as
argued in Surjit Singh, case (supra) does not hold good.
F
In this regard Mr. Sodhi appearing for tile State of Punjab has specifically
stated that as per tile Director's decision under the new policy, tile present
rate admissible to any employee is tile same as prevalent in AIIMS. It is also
submitted, under the new policy in case of emergency if prior approval for
treatment in the private hospital is not obtained, t11e ex-post-facto sanction
can lie obtained later from tile concerned Board or authority for such medical G
reimbursement. After due consideration we find t11ese to be reasonable.

Now we revert to tile last submission, whether t11e new State policy is
justified in not reimbursing an employee, his full medical expenses incurred
on such treatment, if incurred in any hospital in India not being a Government H
1134 SUPREME COURT REPORTS [1998] l S.C.R.

A hospital in Punjab. Question is whether the new policy which is restricted by
the financial constraints of the State to the rates in AIIMS would be in
violation of Article 21 of the Constitution of India. So far as questioning the
validity of govemmencal policy is concerned in our view it is not normally
within the domain of any court, to weigh the pros and cons of the policy or
B to scrutinize it and test the degree of its beneficial or equitable disposition
for the pmpose of varying, modifying or annulling it, based on however
sound and good reasoning, except where it is arbitrary or violative of any
constitutional, statutory or any other provision of law. When Government
forms its policy, it is based on number of circumstances on facts, law including
constraints based on its resources. It is also based on e:qiert opinion. it would
C be dangerous if court is asked to test the utility, beneficial effect of the policy
or its appraisal based on facts set out on affidavits. The Court would dissuade
itself from entering into this realm which belongs to the executive. It is within
this matrix that it is to be seen whether the new policy violates Article 21
When it restricts reimbursement on account of its financial constraints.

D When we speak about a right, it corelates to a duty upon another,
individual, employer, Government or authority. In other words, the right of one
is an obligation of another. Hence the right of a citizen to live under Article
21 casts obligation on the State. This obligation is further reinforced under
Article 47, it is for the State to secure health to its citizen as its primary duty.
E No doubt Government is rendering this obligation by opening Government
hospitals and health centers, but in order to make it meaningful, it has to be
within the reach of its people, as far as possible, to reduce the queue of
waiting lists, and it has to provide all facilities for which aii employee looks
for at another hospital. Its up-keep; maintenance and cleanliness has to be
beyond aspersion. To employ the best of talents and tone up its administration
F to give effective contribution. Also bring in awareness in welfare of hospital
staff for their dedicated service, give them periodical, medico-ethical and
service oriented training, not only at the entry point but also during the whole
tenure of their service. Since it is one of the most sacrosanct and valuable
rights of a citizen and equally sacrosanct sacred obligation of the State, every
G citizen of this welfare State looks towards the State for it to perform its this
obligation with top priority including by way of allocation of sufficient funds.
This in tum will not only secure the right of its citizen to the best of their
satisfaction but in tum will benefit the State in achieving its social, political A

and economical goal. For every return.there has to be investment. Investment
needs resources and finances. So even to protect this sacrosanct right finances
H are an inherent requirement. Harnessing such resources needs top priority.
STA TE v. R.L. BAGGA [MISRA, J.] 1135
Coming back to test the claim of respondents, the State can neither urge A
nor say that it has uo obligation to provide medical facility. If that were so
it would be ex facie violative of Article 21. Under the new policy, medical
facility continues to be given and now an employee is given free choice to
get treatment in any private hospital in India but the amount of payment
towards reimbursement is regulated. Without fixing any specific rate, the new B
policy refers to the obligation of paying at the rate fixed by the Director. The
words are;

".... to the level of e)qJenditure as per the rate fixed by the Director,
Health and Family Welfare, Punjab for a similar treatment package or
actual eiqJenditure which ever is less." C
The new policy does not leave this fixation to the sweet will of the
Director but it is to be done by a Committee of technical experts.

"The rate for a particular treatment would be included in the advice
issued by the District/State Medical Board. A Committee of technical D
experts shall be constituted by the Director, Health and Family Welfare,
Punjab to finalize the roles of various treatment packages."

No State or any country can have unlimited resources to spend on any
of its project. That is why it only approves its projects to the extent it is
feasible. The same holds good for providing medical facilities to its citizen E
including its employees. Provision of facilities cannot be unlimited. It has to
be to the extent finance pennit. If no scale or rate is fixed then in case private
clinics or hospitals increase their rate to exorbitant scales, the State would be
bound to reimburse the same. Hence we come to the conclusion that principle
of fixation of rate and scale under this new policy is justified and cannot be
held to be violative of Article 21 or Article 47 of the Constitution of India. F
In Vincent v. Union of India: AIR (1987) SC 990:

" In a welfare State, therefore, it is the obligation of the State to
.:nsure the creation and the sustaining of conditions congenial to
good health..... In a series of pronouncements, during the recent G
years, this court has culled out from the provisions of Part- IV of the
Constitution, the several obligations of the State and called upon it
to effectuate tllem in order that the resultant picture by the constitution
fathers may become a reality."

The next question is whether the modification of the policy by the State H
1136 SUPREME COURT REPORTS [1998] l S.C.R.

A by deleting its earlier decision of permitting reimbursement at the Escort and
other designated hospital's rate is justified or not? This of course will depend
on the facts and circumstances. We have already held that this court would
r
not interfere witl1 any opinion formed by the government if it is based on
relevant facts and circumstances or based on expert advice.

B Any State endeavor for giving best possible health facility has direct
co-relation with finances. Every State for discharging its obligation to provide
some projects to its subject requires finances. Article 41 of the Constitution
gives recognition to this aspect. 'Article 41: Right to work, to educate and
to public assistance in certain cases: The State shall, Wilht'n lk /irnilsefils
C tOO"'mic capacl'o/ and development, make effective provisions for securing
the right to work, to education and to public assistance in cases of
unemployment, old age sickness and disablement, and in other cases of
undeserved want.'

lt,is submitted by the appellants that earlier under tl1e 1991 policy, for
D bringing in some of the designated Hospital for treatment, sanction from
Finance department was obtained. Later upon an appraisal of its expenditure
it was found that the bulk of the States budget was being taken by few elites y
for such treatment like Heart ailment etc. to the detriment of large number of
other employees who suffered. Hence on the advise of the Finance department
E by means of order dated 9th September, 1994 the facility of reimbursement of
full charges at designated hospital was withdrawn even under the old policy
of 1991 from 9.9.94.

Financial constraints on the State is also evident from what is recorded
in the case of Waryam Singh, (supra), which is also a case from Punjab:-"
F •
Para 30 - When Civil Writ Petition No. 16570of1995 came before the
Division Bench on 16.11.1995, the Court issued' a notice to the
respondents to show cause as to why a direction may not be issued
to tl1e Government to decid~ all pending matters of medical
reimbursement. In pursuance of the order dated 16.11.1995, the learned
G Government counsel produced before the Court a list of cases pending
in 57 departments/offices of the Government of Punjab. These lists
show that over 20,000 cases involving claim of medical reimbursement
are pending in the various departments/offices of the Government. In •
some cases, the claim is for as small amount as of Rs. 10 and as high
H as of Rs. 1,75,000. These lists also show that some cases of medical
STATE v. R.L. BAGG A [MISRA, J.] 1137
reimbursement are pending for last more than six years. In other cases, A
the duration of pendency is less. Reasons given in majority of the
cases are absence of sanction or paucity of funds."

Learned Counsel for the appellant submits that in the Writ petition filed,
the respondent did not specifically challenge the new policy of 1995. If that
was done the State would have placed all such material in detail to show the B
financial strain. We having considered the submission of both the parties, on
the aforesaid facts and circumstances, hold that the appellant's decision to
exclude the designated hospital cannot be said be such as to be violative of
Article 21 of the Constitution. No right could be absolute in a welfare State.
A man is a social animal. He cannot live without the cooperation of large C
number of persons. Every article one uses is the contribution of many. Hence
every individual right has to give way to the right of public at large. No every
fundamental right under Part III of the Constitution is not absolute and it is
to be within permissible reasonable restriction. This principle equally applies
when there is any constraint on the health budget on account of financial
~ stringencies. But we do hope that government will give due consideration and D
priority to the health budget in future and render what is best possible.

For the aforesaid reasons and findings we uphold governments new
policy dated 13th February, 1995 and further hold it not to be violative of
Article 21 of the Constitution of India.
E
In the Civil Appeals arising out of SLP(C) Nos. 13167/97 and 12418/97,
th~ surgery at Escorts was after the introduction of the new po.licy and
therefore the extent of medical reimbursement can be only according to the
rates prescribed by AIIMS. However, the respondents therein are not entitled
to the full expenditure that was incurred at Escorts. We, therefore, allow the F
appeals in part and direct that the respondents are entitled to reimburse only
at AIIMS rate. The appellant will therefore reimburse the. respondents to the
extent within one month from today.

The appeals arising out ofSLP (C) No. 12143/97 and 12144/97 though
the treatment at Escorts was after the new policy the amount as claimed has G
already been paid at Escorts rates. On the facts and circumstances of this
case, we are not inclined to interfere.and therefore no question of any refund
arises. These appeals are dismissed.

So far as the appeal arising out of SLP (C) No. 11968/97 is concerned,
we find that the respondent had the heart attack on 9th February, 1995 and H
1138 SUPREME COURT REPORTS [ 1998] 1 S.C.R

A was advised to go to Delhi on 18th February, 1995 but on account of long
strike in the All India Institute of Medical Sciences (AIIMS) he was admitted
in the Escorts. On those facts we are not inclined to interfere. The respondent
has been paid at the admissibl~ rate in AIIMS but claims the difference
between what is paid and what is admissible rate at Escort. Looking to the
facts and circumstances of this case we hold that the respondent in SLP (C)
B No. 11968/97 is entitled to be paid the difference amount of what is paid and
what is the rate admissible in Escorts then. The same should be paid within
one month from today. We make it clear reimbursement to the respondents
as approved by us be not treated as precedent but has been given on the
facts and circumstances of these cases.
c For the reasons and findings recorded herein before, the new policy
dated 13th February, 1995 is upheld. The impugned High Court orders to that
extent are set aside, Appeals arising out ofSLP(C) Nos. 13167 and 12418 of
1997 are allowed to the extent indicated above and are disposed of accordingly.
Appeals arising out of SLP (C) Nos. 12143, 12144 and 11968 of 1997 are
D dismissed, subject to the further direction given in the appeal arising out of <
SLP (C) No. 11968 of 1997. There will be no order as to costs.

V.S.S. Appeal allowed of.