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ESI hospitals covered under Consumer Protection Act

Consumer courts have been given additional role by the government and the judiciary under the Consumer Protection Act (CPA), 1986.

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Consumer courts have been given additional role by the government and the judiciary under the Consumer Protection Act (CPA), 1986.

In a recent order of the Supreme Court of India, Employees State Insurance hospitals have also been included in the ambit of justice given by Consumer Courts. This was the order in the case of Kishore Lal vs chairman, Employees State Insurance Corporation (ESIC).

Lal, a workman covered under ESIC, took his wife to an ESIC hospital for complications arising out of diabetes. She was admitted in hospital, but her condition deteriorated prompting Lal to transfer her to a private hospital.

There it was known that both the diagnosis and treatment given to her was incorrect. Lal took his grievance to the district forum at Sonepat alleging deficiency of service. The forum held that the services rendered by the ESIC were gratuitous in nature and hence not covered under CPA and dismissed the case.

When Lal took the matter to the State and National Commissions, the forums agreed that the ESIC service was not covered under the Act. Lal then took the matter to the Supreme Court by way of a Special Leave Petition (SLP).

He stated that as a person who contributed to the ESIC via his employer’s payment of the relevant fee, coupled with some deduction from his own salary, the services rendered by the ESIC were not ‘free of charge’ but arose out of consideration paid by him.

The ESIC on the other hand argued that the services rendered by the organisation were free of charge, as the consumer did not pay any money for the treatment, and hence fell within the exception of the Consumer Protection Act, which states that free services were outside the purview of the Act.

It was further argued that under the ESIC Act, all disputes arising from services rendered to ESIC beneficiaries were to be adjudicated by the ESIC Courts and the consumer court thus had no jurisdiction to hear disputes regarding the same.

The SC rejected both these contentions. Relying on the famous case of Indian Medical Association vs VP Shantha, which was reinforced by the case of Laxman Thamappa Kotgiri vs Central Railway, the court held that when an employee gets the benefits of a service that arises from his employment, such service is part of his terms of employment and cannot be labeled ‘free’.

The SC held that the ESIC Act did not envisage cases of medical negligence being filed before it and the CPA was the act to which any consumer could turn for relief of his grievances.

The matter was remanded back to the district forum, Sonepat for fresh determination of the case on merits.

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