The importance of Privacy and Legal Rights of people with Mental Illness is manifest. This topic has long been overlooked, hampered in part by lack of proper research and limited existing literature, especially in relation to India. One in seven people in India (roughly 14% of the population) are affected by mental disorders of varying severity and almost 10% of the population require intensive institutionalized care. The World Health Organization estimates that India will brook an economic loss of 1.03 trillion 2010 US Dollars, between 2012-30, due to mental health conditions. Added to this, lack of awareness about their legal rights among patients is widespread. In India, this is one of the factors due to which there have been very few cases where an accused was able to successfully claim insanity defence, another factor for the same is that the criminal lability of a mentally ill person depends more on discretion of judges and less on medical reports, which allows the creation of a loophole that puts mentally ill people at disadvantage. Regarding privacy rights, patients in mental health institutions have next to none. This paper divides right to privacy into two parts, namely: ‘confidentiality’ and ‘privacy of the institutionalized’, while the first aspect is taken care of in the Indian legislatures, the second aspect is almost entirely overlooked. In this paper we aim to discuss and analyse, privacy and legal rights of the patients, recent legislative developments in the area and put forth certain criticism and solutions for the same.