The Punjab and Haryana High Court has raised concerns with the Punjab government regarding the State Health Agency's inability to disburse outstanding payments to several hospitals participating in the Ayushman Bharat Scheme.

Justice Vinod S. Bhardwaj noted that the State failed to provide a satisfactory explanation for withholding funds already received from the Government of India, which have not been disbursed to the hospitals.

“Ordinarily any such action would have called for stern orders against the erring officials who misdirected the funds and diverted the same for unauthorized use. However, before proposing any action, it is deemed expedient to seek a detailed response from the State about the financial reimbursement received by the State of Punjab from the Union of India from December 2021 up till now and how that money has been utilized. The affidavit shall also inform whether the amount received from Union of India towards Ayushmaan Bharat Payments could be used for the said purposes (for which the amount has been utilized) or not,” the Court ordered.

The Court took decisive action by directing the Principal Secretary of Finance to submit an affidavit detailing the expenditures incurred by the State from December 2021 to September 2024 across several categories:

1. **Advertisement Costs**: Breakdown of expenses for publishing advertisements in print and audio-visual media, specifying the states and languages where these ads were disseminated.
   
2. **Renovation Expenses**: Costs related to the renovation of residences and offices for Class-I officers and Ministers/MLAs in Punjab.
   
3. **Vehicle Purchases**: Expenditures on new vehicles for Ministers, MLAs, and Class-I officers, including their makes.
   
4. **Litigation Costs**: Legal expenses incurred in cases before the Supreme Court of India or the Delhi High Court, aimed at defending the interests of the State or its agencies.
   
5. **Social Welfare Schemes**: Funds spent on various social welfare initiatives, such as free electricity and the Atta Dal Scheme, in comparison to budgetary allocations for the same period.

The Court emphasized that this information is crucial to determine if funds or grants allocated for specific purposes are being misapplied or misused. It reiterated that the State, having received these funds, acts as a custodian and is obligated to distribute them to the rightful beneficiaries. The government cannot withhold or misappropriate these grants at the expense of the actual recipients, leaving citizens to fight for their dues.

This ruling arose from a petition filed by the Indian Medical Association (IMA) Punjab and others, seeking the release of their dues under the Ayushman Bharat Scheme. The Court was informed that over ₹500 crores were pending with the State Health Agency as of December 2022, with only ₹26 crores released thus far. The State claimed that the pending claims were under active review.

Additional Solicitor General Satya Pal Jain, representing the Centre, explained that under the Ayushman Bharat Scheme, 60% of medical bills are to be reimbursed by the Union Government, with the remaining 40% covered by the State. He further stated that the Union Government had released ₹355.48 crores to the State up to the 2023-24 financial year, and it is the responsibility of the State Health Agencies to disburse these funds, including their 40% share. However, he asserted that the State has not only failed to release its share but has also misused the funds already received from the Union Government.

The Court expressed surprise at the withholding of payments and ordered that the salaries of several officials from the State Health Agency—including Kumar Rahul, IAS, Principal Secretary of Health; Babita, Chief Executive Officer; Deepak, Director; and Sharanjit Kaur, Deputy Director—be attached until the next hearing. The case is set to be heard again on October 16.

Advocate Adityajit Singh Chadha represented the petitioners, while Deputy Advocate General Akshita Chauhan represented the State of Punjab. Senior Panel Counsel Brijeshwar Singh Kanwar represented the State Health Agency, and Additional Solicitor General Satya Pal Jain, along with Senior Panel Counsel Gurmeet Kaur Gill, represented the Centre. Advocates Amandeep Singh Talwar, Bomi Patel, and Varun Gupta represented another respondent.

Case Title; Indian Medical Association Punjab and Others vs State of Punjab and Others