The Kerala High Court has affirmed that procedural compliance under the Pradhan Mantri Bhartiya Janaushadhi Kendra (PMBJK) guidelines is not discretionary but mandatory. The judgment reinforces that administrative authorities cannot bypass market viability assessments, even in pursuit of public health objectives, setting a critical precedent for licensing decisions in public welfare schemes.
Background & Facts
The Dispute
The appellant, a long-standing operator of a Pradhan Mantri Bhartiya Janaushadhi (PMBJ) store near Alappuzha Medical College since 2017, challenged the approval granted to the third respondent for opening a second PMBJK store within close proximity. The appellant argued that the approval was granted without conducting a proper market survey as required under the PMBI Guidelines (Ext.P1), thereby threatening the viability of his established business and undermining the scheme’s intent to ensure equitable access, not saturation.
Procedural History
- 2024: Writ Petition (WP(C) No.42741/2024) filed in the Kerala High Court seeking cancellation of the new store’s allotment and mandamus for compliance with Ext.P1 guidelines.
- 12 November 2025: Learned Single Judge dismissed the writ petition, holding that the guidelines permitted multiple stores near medical colleges and that the market survey had been duly conducted.
- 27 February 2026: Writ Appeal filed under Section 5 of the Kerala High Court Act, 1958, challenging the dismissal.
Relief Sought
The appellant sought: (i) cancellation of the store code allotment to the third respondent; (ii) direction to conduct a proper market survey before any new approval; (iii) withdrawal of approval if survey deems the location non-viable; and (iv) exemption from English translation of vernacular documents.
The Legal Issue
The central question was whether Clause V(d)(ii) of the PMBI Guidelines (Ext.P1) mandates a documented, substantive market survey before approving a new PMBJK store, even when the proposed location falls within the 500-meter exemption zone near a medical college.
Arguments Presented
For the Appellant
The appellant’s counsel contended that the PMBI Guidelines are binding statutory instructions, not advisory. Reliance was placed on Pinaki Banerjee v. Union of India (Calcutta High Court), which held that deviation from the guidelines - even for public interest - violates the rule of law. The appellant argued that the absence of a verifiable, objective survey rendered the approval arbitrary and violative of Article 14. The grant of a second store in a saturated area, he submitted, defeats the scheme’s purpose of equitable distribution.
For the Respondent
The Central Government counsel argued that the market survey report was duly prepared and considered, highlighting patient influx, population density, and lack of affordable alternatives near the medical college. It was submitted that Clause V(d)(ii) permits multiple stores near medical institutions, and the survey was not a mere formality but a substantive evaluation. The respondents emphasized that the PMBJK scheme’s objective of accessibility justifies strategic expansion, and the Single Judge correctly found no procedural lapse.
The Court's Analysis
The Court undertook a textual and purposive interpretation of Clause V(d)(ii) of Ext.P1, which states: "Location and number of kendras shall be determined by the PMBI after examining the scope of viability of locations after market survey." The Court rejected the notion that the survey could be a perfunctory exercise. It observed that the phrase "examining the scope of viability" implies a substantive, evidence-based assessment - not a post-hoc justification.
"The guidelines do not permit discretion to bypass the survey merely because the location is near a medical college. The exemption from distance norms is procedural; the survey requirement is substantive."
The Court noted that while the respondents claimed a survey was conducted, no such report was produced before the Single Judge or in the appeal record. The mere assertion of a survey, without documentation or analysis, cannot satisfy statutory obligation. The Court distinguished Pinaki Banerjee as directly on point: guidelines governing public welfare schemes must be followed as written, and administrative convenience cannot override procedural safeguards.
The Court further held that the Single Judge erred in focusing solely on the scheme’s objective - affordable medicine access - while ignoring the procedural architecture designed to prevent market distortion. The principle of legitimate expectation of existing licensees, who invested years to establish viability, was also implicitly recognized.
The Verdict
The writ appeal was dismissed. The Court upheld the Single Judge’s conclusion that the approval was valid, but only because the respondents’ submission - that a survey was conducted - was not contested on record. The Court, however, made clear that the absence of a produced survey report was a procedural defect, and future approvals must be accompanied by verifiable survey documentation to withstand judicial scrutiny.
What This Means For Similar Cases
Market Survey Is Not a Formality
- Practitioners must demand production of the full market survey report in any challenge to PMBJK licensing.
- Administrative orders citing "survey conducted" without attaching or referencing the report are vulnerable to quashing.
- Courts will treat the survey as a mandatory precondition, not a discretionary step.
Proximity Exemptions Do Not Override Substantive Requirements
- The 500-meter exemption near medical colleges applies only to distance norms, not to the survey obligation.
- Licensing authorities cannot use proximity as a shield to bypass viability analysis.
- Existing licensees may now invoke legitimate expectation to challenge new approvals in saturated zones.
Judicial Scrutiny of Welfare Schemes Is Procedural, Not Substantive
- Courts will not interfere with policy goals but will enforce procedural compliance.
- This judgment establishes that public interest cannot justify procedural shortcuts - even in health schemes.
- Future challenges should focus on documentation gaps, not policy outcomes.
