The macabre practice was uncovered in the town of Tripura, India, where boxes of hilsha fish were found resting next to the cadavers of the recently deceased.
They were stored there overnight prior to delivery to market the following day. Charges were as low as 20 cents per night. The fish were sold on to restaurants and housewives and ended up on the plates of hundreds of diners.
The practice was uncovered by a journalist posing as a fishmonger.
Indian Health Minister Ghulam Nabi Azad has now ordered an inquiry and one hospital employee had been suspended.
Tripura is bordered by Bangladesh on three sides where the Hilsha fish is the national dish.
About 60 percent of the world's hilsha fish are found in Bangladesh and it contributes more than one per cent of the country's GDP.