The study will be double blind with respect to rifaximin, and randomization will be performed using tables of computer-generated random numbers. All subjects will be followed up till the recovery of HE (primary end point) or 10 days whichever is earlier. In the Lactulose group (group A) patients will receive 30-60 ml of lactulose in 2 or 3 divided doses so that patient passes 2-3 semisoft stools per day along with placebo . In the lactulose plus rifaximin group (group B) patients will receive cap rifaximin 400mg three times a day along with lactulose. Primary endpoints will be recovery of overt HE patients who will not recover from HE after 10 days will be continued on the same treatment. Total duration of the study is 1 year.

Inclusion Criteria:

• Cirrhosis
• Age 18-80
• Hepatic encephalopathy grade II-IV
• Informed consent

Exclusion Criteria:

1. Degenerative CNS disease or major psychiatric illness
2. Serum creatinine > 1.5 mg/dl
3. Active alcohol intake <4 weeks prior to present episode
4. Others metabolic encephalopathies
5. Hepatocellular Carcinoma
6. Severe comorbidity such as CHF, Pulmonary disease, Neurological & Psychiatric problems impairing quality of life