Observing that the services rendered by hospitals run by the Employees State Insurance (ESI) Corporation are not free of cost, the Supreme Court has ruled that persons availing of treatment in such hospitals can drag them to consumer courts and claim damages for deficiency in service.
“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 Consumer Protection Act,” a three-judge Bench headed by Justice B N Agrawal held.
The Bench, also comprising Justices PP Naolekar and Justice Dalveer Bhandari reversed the finding of the National Consumer Disputes Redressal Commission that an ESI beneficiary was not entitled to any compensation as he/she was not a consumer within the meaning of the Act.
The ruling would benefit millions of employees across the country, who avail of the ESI scheme run by the Central Government. As necessary fallout of this verdict, complaints and claims against ESI hospitals can flood consumer courts, which offer quick and cheaper justice with lesser procedural wrangles.
“The service rendered by the medical practitioners of hospitals/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,” the Bench said.
Describing ESI scheme as an insurance scheme where the medical care offered by the ESI hospitals are paid for under a contributory scheme, the apex court said, “as such the service given… to a member of the Scheme or his family cannot be treated as gratuitous.”
The court allowed the appeal of one Kishore Lal, who had claimed compensation from an ESI-run hospital on the ground that the health of his diabetic wife deteriorated drastically due to negligence and improper medication given by ESI doctors. It ordered the District Forum to examine his claim afresh.
However, his compensation claim was dismissed by the District Consumer Forum, Sonepat, Haryana, the State Consumer Disputes Redressal Commission and the National Commission on the ground that treatment under the ESI scheme did not come under the purview of the CP Act, as it was not motivated by profit.
Rejecting the consumer courts’ finding, the apex court held that since under the ESI scheme, the employee bears the expenses of treatment for self and dependents, the service rendered by ESI hospitals cannot be construed as "free of charge" so as to make it outside the purview of the Act.
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