Denial Of Emergency Reimbursement Under Health Scheme Directly Impinges Article 21: Karnataka High Court Directs Government To Consider Cashless Emergency Care For CGHS Beneficiaries

The Court directed the State to consider a structured cashless framework which would reduce disputes over reimbursement, enhance transparency, and ensure that beneficiaries are not left financially exposed at the most vulnerable moments of their lives.

​The Bench of Justice Suraj Govindaraj observed, “The constitutional underpinning of this approach is implicit in the reasoning adopted by the Apex Court. Though Article 21 is not expressly cited, paragraph 18 unmistakably anchors the CGHS in the concept of a welfare State and the obligation to protect life and health, which form an inseparable part of the right to life under Article 21. Denial of reimbursement for emergency life-saving treatment, despite eligibility under the scheme, would therefore render the right illusory and defeat the constitutional guarantee of dignified existence…The right to health and timely medical treatment is now firmly recognised as an integral facet of the right to life guaranteed under Article 21 of the Constitution of India. The obligation of the State does not cease with the provision of mere access to medical facilities, but extends to ensuring that the financial burden of life-saving treatment does not render the right illusory. Where a government servant or pensioner is compelled, by reason of medical emergency, to undergo critical treatment, denial of reimbursement in spite of eligibility under an existing health scheme directly impinges upon the dignity and security that Article 21 seeks to protect.”

Advocate Sandeep Goyal appeared on behalf of the Appellant, whereas DAG Mamta Singla Talwar, Addl. AG Saurabh Kapoor appeared for the Respondents.

Facts of the case

The Petitioner, a retired IAS officer of the Madhya Pradesh cadre, resided in Bangalore with her husband, a retired Executive Director. As a retired civil servant, she was a beneficiary of the Central Government Health Scheme (CGHS) and was entitled to all its benefits. The Petitioner's husband was a chronic cardiac patient with two previous bypass surgeries.

In April 2023, he was rushed to Narayana Institute of Cardiac Sciences for emergency treatment after his heart's ejection fraction dropped to 20%. In October 2023, his condition deteriorated further, and doctors performed an emergency CRT-D implantation to prevent sudden cardiac death. The Petitioner paid Rs. 15,30,093/- for the procedure and submitted a reimbursement claim on December 26, 2023.

While the claim was pending, the Petitioner’s husband passed away on March 18, 2024, following a severe respiratory attack. The Petitioner requested the disbursement of funds again in June 2024. Although she provided all the requested documents, including old ECG reports, Respondent No. 3 rejected the claim on October 7, 2024. The Respondent stated that their experts did not consider the emergency CRT-D implantation to be justified.

A writ petition was filed under Articles 226 and 227 of the Constitution of India, praying to quash the impugned email communications sent by Respondent No. 3. Further seeking to issue a writ of mandamus directing the respondents to make full reimbursement of the medical reimbursement claim of the Petitioner.

Observations of the Court

The Court observed, “Medical reimbursement under the Central Government Health Scheme is therefore not a matter of administrative discretion or charity, but a component of the constitutional obligation of the State flowing from Article 21. Any interpretation of the scheme that results in a pensioner being left to bear catastrophic medical expenses incurred for survival, particularly in emergency situations, would amount to an unreasonable restriction on the right to life and health. The State cannot, after the event, substitute its administrative assessment for the contemporaneous medical judgment of treating specialists, when such substitution has the effect of negating the constitutional guarantee.”

The Court said that the impugned action of the Respondents also failed the test of Article 14 of the Constitution. The rejection of the Petitioner's claim on the basis of an ex post facto technical opinion, without furnishing a speaking order, without disclosing the deliberative process, and after inordinate delay, is manifestly arbitrary, the Court added.

It was further added that a welfare scheme intended to provide uniform protection to similarly situated government servants and pensioners cannot be administered in a manner that is mechanical, opaque, or indifferent to individual circumstances, particularly where life- saving treatment is concerned.

The Court held, “The doctrine of legitimate expectation is squarely attracted in the present case. Throughout her service career, the Petitioner was assured that medical needs of herself and her dependent family members would be taken care of under the CGHS, both during service and after retirement. This assurance is neither abstract nor aspirational; it is institutionalized through statutory rules, executive instructions, and consistent past practice. A government servant structures her financial planning and post-retirement security on the premise that such medical protection will be honoured. The sudden denial of reimbursement, after the expenditure has already been incurred in an emergency, defeats this legitimate expectation and undermines trust in public administration…Equally, the principles underlying promissory estoppel is embedded in the judgment. The CGHS represents a continuing promise by the State to bear the cost of bona fide medical treatment of its employees and pensioners.”

As regards the application of the principle of promissory estoppel, the Court said, “The principle of promissory estoppel, restrains the State from resiling from representations that have been acted upon to the detriment of the citizen. The CGHS represents a clear and unequivocal assurance that eligible beneficiaries will be reimbursed for bona fide medical treatment, particularly in emergent circumstances. Acting on this representation, the Petitioner incurred substantial expenditure for the life-saving treatment of her husband. Having induced such reliance, it is not open to the Respondents to deny reimbursement by invoking technical objections or by questioning, with hindsight, the medical necessity of the procedure…This financial vulnerability becomes even more pronounced after retirement. Pension, by its very nature, is intended to provide subsistence and dignity, not to absorb sudden and substantial medical expenditures running into several lakhs of rupees. A retired government servant, particularly one who has crossed the age of superannuation, is least equipped to bear the burden of emergency medical procedures involving advanced life-saving devices such as CRTD implants, the cost of which is far beyond the routine medical expenses contemplated in ordinary circumstances.”

Conclusion

It was concluded that the Petitioner lost her husband during the pendency of the reimbursement claim. In such circumstances, the Respondents were expected to act with sensitivity and promptness, rather than subjecting the Petitioner to repeated correspondence and an opaque decision-making process, without furnishing any detailed deliberation or speaking order.

“A welfare State governed by the rule of law cannot permit a situation where a retired government servant is forced to choose between saving the life of a spouse and risking financial ruin. Such an outcome would render Articles 14 and 21 nugatory in their application to the most vulnerable phase of a public servant’s life. The constitutional promise of dignity, fairness, and non-arbitrariness demands that health schemes like the CGHS be interpreted and implemented purposively, humanely, and in a manner that advances, rather than frustrates, their underlying object.” the Court said.

It was concluded, “A cashless treatment mechanism, particularly for emergency and life-saving procedures, would significantly mitigate these hardships and align the administration of the CGHS with constitutional values. Such a system would give meaningful effect to the right to health under Article 21, ensure non-arbitrary access to medical care under Article 14, and reinforce the State’s obligation as a welfare employer. Importantly, directing the Respondents to consider the feasibility of such a mechanism does not amount to judicial encroachment into policy-making, but constitutes a constructive institutional suggestion arising from repeated administrative failures observed by this Court in adjudicating similar disputes.”

Accordingly, the Court directed the Respondents to examine and consider, at the appropriate administrative level, the feasibility and phased implementation of a cashless medical treatment mechanism under the Central Government Health Scheme, particularly for emergency and critical care, to obviate situations where serving or retired government employees and their dependent family members are compelled to initially bear substantial medical expenses and thereafter pursue prolonged reimbursement claims.

Cause Title: Mrs. Ivy Miller Chahal v. Union of India and Ors. [Neutral Citation: 2025:KHC:50803]

Appearances:

Petitioner: Advocate A Madhusudhana Rao

Respondents: CGC Reshma KT

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