Important Point
The medical service rendered in the ESI hospital/dispensary by the Employees’ State Insurance corporation falls within the ambit of Section 2(1)(o) of the Consumer Protection Act, therefore, the consumer forum has jurisdiction to adjudicate upon the case of medical negligence.

Headnote:Consumer Protection Act, 1986 — Section 2(1)(d) and (o) — Services rendered by ESI dispensary/hospital — Whether fall within the ambit of ‘service’ as defined in Section 2(1)(o) of the CP Act — (Yes) — Service given in the ESI hospitals/dispensaries to a member of the Insurance Scheme of medical care or his family cannot be treated as gratuitous — Employees’ State Insurance Act, 1948 — Section 38, 39, 40, 46.
       Held : It is admitted fact that the appellant’s wife was given treatment in the ESI deispensary at Sonepat. Under Section 38 of the ESI Act, all employees in a factory or establishment where the Act applies are required to be insured under the insurance scheme. Section 39 speaks of the contribution which is required to be paid to the corporation for the insurance scheme which shall comprise the contribution payable by the employer and the contribution payable by the employee. The contribution is required to be paid at such rates as may be prescribed by the Central Government. By virtue of Section 40, the principal employer is liable to pay the contributions, both the employer’s contribution and tha employee’s contribution, in the first instance of the employees directly employed by him or by or through an immediate employer. Sub-section(2) of Section 40 author-ises the principal empliyer to recover the contribution made for the employee by dedeucting the same from the wages of the employee. Chapter V of the ESI Act deals with benefits. Sub-section (1) of Section 46 falling within this Chapter contemplates that the insured persons, their depoendents and the persons mentioned under the Section shall be entitled to the various benefites referred to in clauses (a) to (f). Clause (e) reads: “medical treatment for an attendance on insured persons (hereinafter referred to as medical benfits)”. Section 56 is a specific Section which has reference to the medical benefits available to an insured person or to his family member whose condition requires medical treatment and attendance and they shall be entitled to receive medical benefit. Under Section 59, the Corporation is called upon with the approval of the State Government to establish and maintatain in a State such hospitals, dispensaries and other medical and surgical services as it may think fit for the benefit of insured persons and, where such medical benefitis extended to their families.
       (Para 12)
       Held : On a plain reading of the aforesaid provisions of the ESI Act, it is apparent that the Corporation is required to maintain and establish the hospitals and dispensaries and to provide medical and surgical services. Service rendered in the hospital to the insured person or his family member for medical treatment is not free, in the sense that the expense incurred for the service rendered in the hospital would be borne from the contributions made to the insurance scheme by the employer and the employee and, therefore, the principle enunciated in conclusion No. (11) in para 55 in the case of Indian Medical Association (supra) will squarely apply to the facts of the present case, where the appellant has availed the services under the insurance policy which is compulsory under the statute. Wherever the charges for medical treatment are borne under the insurance policy, it would be a service rendered within the ambit of Section 2(1)(o) of the CP Act. It cannot be said to be a free service rendered by the ESI hospital/dispensary.
       (Para 13)
       Held : The service rendered by the medical practitioners of hospital/nursing homes run by the ESI Corporation cannot be regarded as a service rendered free of charge. The person availing of such service under an insurance scheme of medical care, whereunder the charges for consultation, diagnosis and medical treatment are borne by the insurer, such service would fall within the ambit of ‘service’ as defined in Section 2(1)(o) of the CP Act. We are of the opinion that the service provided by the ESI hospital/dispensary falls within the ambit of ‘service’ as defined in Section 2(1)(o) of the CP Act. ESI scheme is an insurance scheme and it contributed for the service rendered by the ESI hospitals/dispensaries, of medical care in its hospitals/dispensaries and as such service given in the ESI hospitals/dispensaries to a member of the Scheme or his family cannot be treated as gratuitous.
       (Para 14)
       Employees’ State Insurance Act, 1948 — Sections 74, 75 — Consumer Protection Act, 1986 — Section 2(1)(d) & (o) — Jurisdiction of Employees’ Insurance Court — Medical negligence — Appellant insured with Employees’ State Insurance Corporation — his wife was admitted in ESI dispensary for her treatment for diabetes — complaint filed under consumer Protection Act alleging that the patient had been diagnosed incorrectly in the ESI dispensary and that her condition continued to deteriorate as doctors were not available even during emergencies — Compensation for negligence doctors and hospital Whether Section 74 read with Section 75 of the Employees’ State Insurance Act ousts the jurisdiction of Consumer Forum as regards the issues involved for consideration — (No) — Jurisdiction of consumer forum is not ousted by virtue of sec.75 of the Employees’ State Insurance Act — Consumer Forum has jurisdiction to adjudicate upon the case of appellate.
       Held : It has been held in numerous cases of the Court that the jurisdiction of a consumer forum has to be construed liberally so as to bring may cases under it for their speedy disposal. In the case of M/s. Spring Meadows hospital and Another v. Harjol Ahluwalia and Another, AIR 1998 SC 1801, it was held that the CP Act creates a framework for speedy disposal of consumer disputes and an attempt has been made to remove the existing evils of the ordinary court system. The Act being a beneficial legislation should receive a liberal construction. In State of Karnataka v. Vishwabarathi house Building Co-op. Society and Others, AIR 2003 SC 1043, the court speaking on the jurisdiction of the consumer fora held that the provisions of the said Act are required to be interpreted as broadly as possible and the for a under the CP Act have jurisdiction to entertain a complaint despite the fact that other for a/courts would also have jurisdiction to adjudicate upon the lis. These judgments have been cited with approval in paras 16 and 17 of the judgment in Secretary, Thirumurugan cooperative Agricultural Credit Society v. M. Lalitha and Others, (2004) 1 SCC 305. The trend consumer forum should not and would not be curtailed unless there is an express provision prohibiting the consumer forum to take up the matter which falls within the jurisdiction of civil court or any other forum as established under some enactment. The court had gone to the extent of saying that if two different for a have jurisdiction to entertain the dispute in regard to the same subject, the jurisdiction of the consumer forum would not be barred and the power of the consumer forum to adjudicate upon the dispute could not be negated.
       (Para 17)
       Held : This Court has considered the principles of the law on negligence in Jacob Mathew v. State of Punjab and Another, (2005) 6 SCC 1. The jurisprudential concept of negligence defies any precise definition. Eminent jurists and leading judgments have assigned various meanings to negligence. The concept as has been acceptable to Indian .jurisprudential thought is well-stated in the Law of Torts, Ratanlal & Dhirajlal (24th Ed. 2002, edited by Justice G.P. Singh). It is stated (at pp. 441-442) :
       “Negligence is the breach of a duty caused by the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs would do, or doing something which a prudent and reasonable man would not do. Actionable negligence consists in the neglect of the use of ordinary care or skill towards a person to whom the defendant owes the duty of observing ordinary care and skill by which neglect the plaintiff has suffered injury to his person or property the definition involves three constituents of negligence: (1) A legal duty to exercise due core on the part of the party complained of towards the party complaining the former’s conduct within the scope of the duty: (2) breach of the said duty: and (3) consequential damage. Cause of action for negligence arises only when damage occurs’” for, damage is a necessary ingredient of this tort.”
       Cause of action for negligence arises only when damage occurs and thus the claimant has to satisfy the court on the evidence that three ingredients of negligence, namely, (a) existence of duty to take care; (b) failure to attain that standard of core; and (c) damage suffered ‘on account of breach of duty, are present for the defendant to be held liable for negligence. Therefore, the claimant has to satisfy these ingredients before he can claim damages for medical negligence of the doctors and that could not be a question which could be adjudicated upon by the Employees’ Insurance Courts which have been given specific powers of the issues, which they can adjudicate and decide. Claim for damages for negligence of the doctors or the ESI hospital/dispensary is clearly beyond the jurisdictional power of the Employees’ Insurance Court. An Employees’ Insurance Court has jurisdiction to decide certain claims which fall under sub-section (2) of Section 75 of the ESI Act. A bare reading of Section 75(2) also does not indicate, in any manner, that the claim for damages for negligence would fall within the purview of the decisions being made by the Employee’s Insurance Court. Further, it can be seen that any claim arising out of and within the purview of the Employee’s Insurance Court is expressly barred by virtue of sub section (3) to be adjudicated upon by a civil court, but there is no such express bar for the consumer forum to exercise the jurisdiction even if the subject matter of the claim or dispute falls within clauses (a) to (g) of sub-section (1) of Section 75 or where the jurisdiction to adjudicate upon the claim is vested with the Employee’s Insurance Court under clauses (a) to (f) of sub-section (2) of Section 75 if it is a consumer’s dispute falling under the CP Act.
       (Para 20)
       Held : Having considered all these aspects, we are of the view that the appellant is a consumer within the ambit of Section 2(1)(d) of the Consumer Protection Act, 1986 and the medical service rendered in the ESI hospital/dispensary by the respondent Corporation falls within the ambit of Section 2(1)(o) of the Consumer Protection Act and, therefore, the consumer forum has jurisdiction to adjudicate upon the case of the appellant. We further hold that the jurisdiction of the consumer forum is not ousted by virtue of sub-section (1) or (2) or (3) of Section 75 of the Employees’ State Insurance Act, 1948. (Para 21)

Judgement Key Points

The legal document establishes that the services provided by the Employees’ State Insurance (ESI) hospital or dispensary fall within the definition of ‘service’ under Section 2(1)(o) of the Consumer Protection Act (CP Act). Since the medical treatment under the ESI scheme is not gratuitous but is funded through contributions made by both the employer and the employee, it constitutes a service for consideration, thereby bringing it under the scope of ‘service’ as defined in the Act (!) (!) .

Furthermore, the document clarifies that the jurisdiction of the consumer forum is not barred by the provisions of the Employees’ State Insurance Act, particularly Sections 74 and 75, which establish the Employees’ Insurance Court for specific disputes related to the implementation and benefits of the ESI scheme (!) (!) . Disputes concerning medical negligence or damages arising from alleged negligence do not fall within the scope of the jurisdiction of the Employees’ Insurance Court, as the Act explicitly limits its jurisdiction to certain claims such as contributions, benefits, and related disputes (!) (!) .

The definition of ‘consumer’ under the CP Act encompasses individuals who hire or avail of services for consideration, including those provided under an insurance scheme like the ESI, when such services are not free of charge (!) (!) . Since the services are rendered under a statutory insurance scheme where the costs are borne through contributions, the recipient qualifies as a ‘consumer’ (!) (!) .

Additionally, the legal principles outlined affirm that claims for damages due to medical negligence, which involve establishing duty of care, breach, and damages, are beyond the jurisdiction of the Employees’ Insurance Court and are more appropriately adjudicated by a civil or consumer forum (!) (!) . The jurisdiction of the consumer forum is to be interpreted broadly to include cases involving services rendered under insurance schemes, provided the services are not gratuitous (!) (!) .

In summary, services provided by the ESI hospital or dispensary are covered under the Consumer Protection Act as ‘services’ obtained for consideration, and the consumer forum has jurisdiction to hear cases related to medical negligence or deficiencies in such services. The statutory provisions of the ESI Act do not exclude or oust this jurisdiction, especially in cases involving alleged negligence or damages (!) (!) (!) (!) (!) .

JUDGMENT

P.P. NAOLEKAR, J.—

1.The appellant was insured with the respondent-Employees’ State Insurance Corporation (for short “the Corporation”) with Insurance No. 913644. The employee’s/appellant’s contribution towards the insurance scheme under the Employees’ State Insurance Act, 1948 (hereinafter referred to as “the ESI Act”) was being deducted regularly from his salary and deposited by his employer with the Corporation. In 1993, the appellant’s wife was admitted in the ESI dispensary at Sonepat for her treatment for diabetes. However, the condition of his wife continued to deteriorate. As alleged by the appellant, there were instances when the doctors were not available even during emergencies. Later, the appellant got his wife medically examined in a private hospital. The tests done revealed that his wife had been diagnosed incorrectly in the ESI dispensary; and that the deterioration in the condition of the appellant’s wife was a direct result of the wrong diagnosis. The appellant filed a complaint under the Consumer Protection Act, 1986 (hereinafter referred to as “the CP Act”) before the District Consumer Disputes Redressal Forum seeking (i) compensation towards mental agony, harassment, physical torture, pains, sufferings and monetary loss for the negligence of the authorities; (ii) direction for removal of, and improvement in, the deficiencies; and (iii) direction for payment of interest on the amount of reimbursement bills. The Corporation through its officers entered appearance and raised certain preliminary objections, namely, (i) that the complaint filed is not maintainable in the District Consumer Forum and is liable to be dismissed as the wife of the complainant was treated in the ESI dispensary, Sonepat, which is a government dispensary and the complainant cannot be treated as a consumer; and (ii) that the complainant is not a consumer within the definition of ‘consumer’ in the CP Act and he is not entitled to file a complaint against the ESI dispensary. It was also contended that the facility of medical treatment in government hospital cannot be regarded as a ‘service’ hired for consideration, apart from the other defences raised in the written statement.

2.The District Consumer Forum relied on the ratio of Birbal Singh v. ESI Corporation,1 1993 II CPJ 1028, wherein on a complaint filed for compensation for being aggrieved by poor medical attention received by the late wife of the complainant at an ESI hospital, the Haryana State Commission had held that the complainants did not come within the ambit of the definition of ‘consumer’ under the CP Act because of the gratuitous nature of the medical services provided. On this basis, the District Forum held that the services rendered by the ESI dispensary are gratuitous in nature and, therefore, out of the purview of the CP Act. Appeal was preferred to the Haryana State Consumer Disputes Redressal Commission and it was urged by the appellant that ESI is a scheme of insurance and hence the service rendered by the Corporation was not gratuitous. The State Commission relying on the judgment in Birbal Singh (supra) and Indian Medical Association v. V.P. Shantha and Others,2 (1995) 6 SCC 651 held that free medical services were not covered by the CP Act and upheld the judgment of the District Forum. Appellant preferred a revision before the National Consumer Disputes Redressal Commission, but the same was also dismissed in limine. Hence, this appeal by special leave.

3.By second counter affidavit filed in August, 2000, the respondent-Corporation have also raised the question of the jurisdiction of a consumer forum. The respondent contended that by virtue of Section 75 of the ESI Act, the dispute raised by the appellant is covered and is to be decided by the Employees’ Insurance Court established under Section 74 of the ESI Act and it being a special Act the jurisdiction of the consumer forum is ousted.

4.From the decisions rendered by the District Forum, the State Commissi

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2007 Supreme(SC) 666

Important PointThe medical service rendered in the ESI hospital/dispensary by the Employees’ State Insurance corporation falls within the ambit of Section 2(1)(o) of the Consumer Protection Act, therefore, the consumer forum has jurisdiction to adjudicate upon the case of medical negligence.

Cases Referred (8)

Important Point
The medical service rendered in the ESI hospital/dispensary by the Employees’ State Insurance corporation falls within the ambit of Section 2(1)(o) of the Consumer Protection Act, therefore, the consumer forum has jurisdiction to adjudicate upon the case of medical negligence.