Case: Union of India (UOI) and Ors Vs. N.K. Srivasta and Ors

Dr. D.Y. Chandrachud, J. 1. Leave granted. 2. The appeal arises from an order of the National Consumer Disputes Redressal Commission dated 7 October 2016. The Union of India, through the Secretary in the Ministry of Health and Family Welfare, and Safdarjung Hospital have challenged the order of the NCDRC. The first Respondent was the original complainant in a consumer complaint instituted before Consumer Disputes Redressal Forum-II, New Delhi. The complaint alleged medical negligence against Sarvodaya Hospital and Safdarjung Hospital. The NCDRC allowed the revision of Sarvodaya Hospital. While exonerating it of the finding of medical negligence, it held Safdarjung Hospital liable to pay the compensation of Rs. 2 lakhs imposed by the State Consumer Disputes Redressal Commission. 3. The spouse of the complainant who was pregnant, was admitted to Sarvodaya Hospital in a medical emergency at about 5 am on 9 March 2004. She delivered a baby at about 8 am, a few hours after admission. The baby was delivered prematurely and, according to the complainant, required medical care in a Nursery ICU. The complainant and his spouse were referred to Safdarjung Hospital for admission of the child for emergency medical care. The grievance against Sarvodaya hospital was that prior to the delivery, it had been represented that the Hospital was fully equipped with a Nursery ICU and that when the complainant came to realise that this was not the case, he felt cheated. The complainant proceeded to Safdarjung Hospital with his spouse and child between 12 and 1 pm on 9 March 2004. The grievance of the complainant was that at Safdarjung Hospital, the baby was not placed in a Nursery ICU, but was initially admitted to the General Ward and thereafter to a General ICU. The child died in the last week of April 2004. A complaint was presented before the District Forum seeking damages against Sarvodaya Hospital and Safdarjung Hospital. 4. The District Forum dismissed the consumer complaint. As regards, Sarvodaya Hospital, it arrived at the finding that there was no misrepresentation of fact and that the Hospital had an independent facility of a Nursery and ICU available. The District Forum held that the spouse of the complainant was operated upon in an emergency to save the lives of the mother and the child. Hence, there was no deficiency on the part of Sarvodaya Hospital in referring the complainant to a specialized facility. As regards Safdarjung Hospital, the complaint was held not to be maintainable on the ground that treatment had been afforded free of cost to the patient. Relying on the decision of this Court in Indian Medical Association v. V.P. Shantha (1995) 6 SCC 651 , the complaint was held not to be maintainable. 5. An appeal was filed before the State Consumer Disputes Redressal Commission by the original complainant. The SCDRC, by its judgment dated 10 December 2013, came to the conclusion that Sarvodaya Hospital was guilty of medical negligence and directed it to pay a sum of Rs. 2,00,000 as compensation and costs quantified at Rs. 20,000. However, the complaint was held not to be maintainable against Safdarjung Hospital. The SCDRC relied upon an affidavit of Dr K C Aggarwal who deposed in support of the plea that the treatment had been provided free of cost without charging any fees. Finding that there was no denial of this assertion and relying on the decision of this Court in Indian Medical Association, the complaint was rejected as against Safdarjung Hospital. However, the SCDRC had also found negligence on the part of Safdarjung Hospital. 6. A revision was filed against the judgment of the SCDRC by Sarvodaya Hospital before the NCDRC. The NCDRC, by its judgment dated 7 October 2016, allowed the revision and came to the conclusion that Sarvodaya Hospital was not guilty of medical negligence. The finding of fact was that the spouse of the complainant had been admitted to the hospital in a precarious condition and was a high risk patient. Relying on the progress notes of the hospital, the NCDRC noted that the hospital had referred the patient to a specialized facility after taking the consent of the complainant. The finding was to the following effect: 19. A brief perusal of the prescription shows that the patient was admitted in the First Opposite party Hospital in a precarious condition of umbilical cord collapsing through the vagina; a gross risk of survival of the baby inside the womb; the risk of the blood supply being cut off and high chances of the baby being born asphyxiated. The progress notes show that all due care and caution was taken which was required under the standard practice of normal medical parlance by the First Opposite party Hospital in delivering the baby through Caesarian Section and hence, no deficiency can be attributed to the first Opposite Party Hospital or its Doctors, as there is no documentary evidence suggesting any kind of negligence in the line of treatment rendered to the patient. The baby was rightly referred to a higher management Hospital, in the absence of the necessary nursery facilities required to handle a premature baby. We hold accordingly. 7. However, having allowed the revision that was filed by Sarvodaya Hospital against the finding of negligence, the NCDRC elaborated on the question as to whether Safdarjung Hospital had been correctly exonerated. Safdarjung Hospital was a party to the proceedings before the NCDRC and was heard in the revision that was filed by Sarvodaya Hospital. The NCDRC noted that though Safdarjung Hospital was exonerated by the District Forum and the SCDRC on the ground that the treatment had been rendered free of charge and the hospital was not amenable to the jurisdiction of the consumer fora under the Consumer Protection Act 1986, the SCDRC had, on merits, come to the conclusion that though it had the facility of a Nursery with a ventilator, it had not been made available to the child of the complainant. The baby was admitted to Ward No. 20, then to Ward No. 18 and eventually in the General ICU. This finding had attained finality. The NCDRC held that the finding of the SCDRC that Safdarjung Hospital was not amenable to the jurisdiction of the consumer fora was contrary to the decision of this Court in Indian Medical Association. The NCDRC held that though the complainant had not filed a revision against the order of the SCDRC specifically holding that Safdarjung Hospital was not amenable to the jurisdiction of the consumer fora, he was not precluded from challenging a finding which was adverse to him in the revision petition. On these facts, the NCDRC sustained the finding of medical negligence against Safdarjung Hospital and directed it to pay compensation quantified at Rs. 2 lakhs. 8. Mr. R S Suri, Additional Solicitor General, has appeared in support of the appeal filed by the Safdarjung Hospital. The submission is that no charges across the board are levied at Safdarjung Hospital and, hence, the finding that was arrived at by the NCDRC is unsustainable. Mr. Dinesh Kumar, learned Counsel has appeared on behalf of the original complainant and opposed the appeal. Sarvodaya Hospital has been represented by Mr. Shantanu Sagar, learned Counsel. 9. While evaluating the submission which has been urged by Mr. R S Suri, it is necessary, at the outset, to have regard to the principles which have been laid down in the judgment of this Court in Indian Medical Association. In the judgment of this Court, the provisions of Section 2(1) (o) of the Act fell for interpretation. Section 2(1)(o) provides as follows: service means service of any description which is made available to the potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, [housing construction], entertainment, amusement or the purveying of news or other information, but does not include rendering of any service free of charge or under a contract of personal service; 10. Interpreting the above provision, a three judge Bench of this Court held that it is only where a hospital provides medical services free of charge across the board to all patients that it would stand outside the purview of the Act. The Court held that a hospital which renders free services to a certain category of patients, while providing for services which are charged to the bulk of others would not lie outside the purview of the jurisdiction of the consumer fora. This principle is evident from the following extract from the decision of this Court: 43...The third category of doctors and hospitals do provide free service to some of the patients belonging to the poor class but the bulk of the service is rendered to the patients on payment basis. The expenses incurred for providing free service are met out of the income from the service rendered to the paying patients. The service rendered by such doctors and hospitals to paying patients undoubtedly fall within the ambit of Section 2(1) (o) of the Act. 11. From the record, we find that, in the present case, the only factual foundation that was led before the District Forum was the evidence of Dr K C Aggarwal who deposed that the patient in question had been treated free of charge. We have scrutinized the grounds of appeal in the Special Leave Petition. Not even a single ground has been raised by Safdarjung Hospital, challenging the factual basis of the finding that has been arrived at by the NCDRC on the issue of jurisdiction. Nor has any other factual material been placed on the record to enable the Court to decide on whether it satisfies the tests enunciated in Indian Medical Association. Hence, in the absence of a proper challenge before the District Forum, the SCDRC or the NCDRC and, as we have seen above, even before this Court, it would be inappropriate for this Court to render a conclusive opinion. We ought not to do so in the absence of a factual foundation in the pleadings and evidence. We are also mindful of the fact that the award in the present case is in a relatively small amount of Rs. 2 lakhs. 12. However, Mr. R S Suri submitted that it would be appropriate for this Court, having regard to the recurring nature of the issue, to leave the question of jurisdiction open to be decided in an appropriate case where a factual foundation can be laid by the Union of India and Safdarjung Hospital, both in the pleadings and evidence. We consider this to be appropriate so as to ensure that while we are affirming the judgment of the NCDRC in the present case on the ground that the quantum of the claim is small enough to not warrant the intervention of this Court, the decision of this Court (or of the NCDRC) is not regarded as a precedent for having decided a question of law in the generality of cases that may arise involving Safdarjung Hospital.

Decision reasoning: 0[ds]11. From the record, we find that, in the present case, the only factual foundation that was led before the District Forum was the evidence of Dr K C Aggarwal who deposed that the patient in question had been treated free of charge. We have scrutinized the grounds of appeal in the Special Leave Petition. Not even a single ground has been raised by Safdarjung Hospital, challenging the factual basis of the finding that has been arrived at by the NCDRC on the issue of jurisdiction. Nor has any other factual material been placed on the record to enable the Court to decide on whether it satisfies the tests enunciated in Indian Medical Association. Hence, in the absence of a proper challenge before the District Forum, the SCDRC or the NCDRC and, as we have seen above, even before this Court, it would be inappropriate for this Court to render a conclusive opinion. We ought not to do so in the absence of a factual foundation in the pleadings and evidence. We are also mindful of the fact that the award in the present case is in a relatively small amount of Rs. 2 lakhs.9. While evaluating the submission which has been urged by Mr. R S Suri, it is necessary, at the outset, to have regard to the principles which have been laid down in the judgment of this Court in Indian Medical Association.In the judgment of this Court, the provisions of Section 2(1) (o) of the Act fell for interpretation.10. Interpreting the above provision, a three judge Bench of this Court held that it is only where a hospital provides medical services free of charge across the board to all patients that it would stand outside the purview of the Act. The Court held that a hospital which renders free services to a certain category of patients, while providing for services which are charged to the bulk of others would not lie outside the purview of the jurisdiction of the consumer fora. This principle is evident from the following extract from the decision of this Court:43...The third category of doctors and hospitals do provide free service to some of the patients belonging to the poor class but the bulk of the service is rendered to the patients on payment basis. The expenses incurred for providing free service are met out of the income from the service rendered to the paying patients. The service rendered by such doctors and hospitals to paying patients undoubtedly fall within the ambit of Section 2(1) (o) of the Act.11. From the record, we find that, in the present case, the only factual foundation that was led before the District Forum was the evidence of Dr K C Aggarwal who deposed that the patient in question had been treated free of charge. We have scrutinized the grounds of appeal in the Special Leave Petition. Not even a single ground has been raised by Safdarjung Hospital, challenging the factual basis of the finding that has been arrived at by the NCDRC on the issue of jurisdiction. Nor has any other factual material been placed on the record to enable the Court to decide on whether it satisfies the tests enunciated in Indian Medical Association. Hence, in the absence of a proper challenge before the District Forum, the SCDRC or the NCDRC and, as we have seen above, even before this Court, it would be inappropriate for this Court to render a conclusive opinion. We ought not to do so in the absence of a factual foundation in the pleadings and evidence. We are also mindful of the fact that the award in the present case is in a relatively small amount of Rs. 2 lakhs.12. However, Mr. R S Suri submitted that it would be appropriate for this Court, having regard to the recurring nature of the issue, to leave the question of jurisdiction open to be decided in an appropriate case where a factual foundation can be laid by the Union of India and Safdarjung Hospital, both in the pleadings and evidence. We consider this to be appropriate so as to ensure that while we are affirming the judgment of the NCDRC in the present case on the ground that the quantum of the claim is small enough to not warrant the intervention of this Court, the decision of this Court (or of the NCDRC) is not regarded as a precedent for having decided a question of law in the generality of cases that may arise involving Safdarjung Hospital.13. Another aspect which requires mention is that the SCDRC had held that Safdarjung Hospital was not amenable to the jurisdiction created by the Act. This was not challenged by the complainant. Sarvodaya Hospital challenged the order of the SCDRC. The NCDRC reversed the finding on maintainability which was in favour of Safdarjung Hospital in a revision by Sarvodaya Hospital. It attempted to do complete justice, ignoring that it is not entrusted with the jurisdiction which is exclusively conferred on this Court Under Article 142.9. While evaluating the submission which has been urged by Mr. R S Suri, it is necessary, at the outset, to have regard to the principles which have been laid down in the judgment of this Court in Indian Medical Association.In the judgment of this Court, the provisions of Section 2(1) (o) of the Act fell for interpretation.10. Interpreting the above provision, a three judge Bench of this Court held that it is only where a hospital provides medical services free of charge across the board to all patients that it would stand outside the purview of the Act. The Court held that a hospital which renders free services to a certain category of patients, while providing for services which are charged to the bulk of others would not lie outside the purview of the jurisdiction of the consumer fora. This principle is evident from the following extract from the decision of this Court:43...The third category of doctors and hospitals do provide free service to some of the patients belonging to the poor class but the bulk of the service is rendered to the patients on payment basis. The expenses incurred for providing free service are met out of the income from the service rendered to the paying patients. The service rendered by such doctors and hospitals to paying patients undoubtedly fall within the ambit of Section 2(1) (o) of the Act.11. From the record, we find that, in the present case, the only factual foundation that was led before the District Forum was the evidence of Dr K C Aggarwal who deposed that the patient in question had been treated free of charge. We have scrutinized the grounds of appeal in the Special Leave Petition. Not even a single ground has been raised by Safdarjung Hospital, challenging the factual basis of the finding that has been arrived at by the NCDRC on the issue of jurisdiction. Nor has any other factual material been placed on the record to enable the Court to decide on whether it satisfies the tests enunciated in Indian Medical Association. Hence, in the absence of a proper challenge before the District Forum, the SCDRC or the NCDRC and, as we have seen above, even before this Court, it would be inappropriate for this Court to render a conclusive opinion. We ought not to do so in the absence of a factual foundation in the pleadings and evidence. We are also mindful of the fact that the award in the present case is in a relatively small amount of Rs. 2 lakhs.12. However, Mr. R S Suri submitted that it would be appropriate for this Court, having regard to the recurring nature of the issue, to leave the question of jurisdiction open to be decided in an appropriate case where a factual foundation can be laid by the Union of India and Safdarjung Hospital, both in the pleadings and evidence. We consider this to be appropriate so as to ensure that while we are affirming the judgment of the NCDRC in the present case on the ground that the quantum of the claim is small enough to not warrant the intervention of this Court, the decision of this Court (or of the NCDRC) is not regarded as a precedent for having decided a question of law in the generality of cases that may arise involving Safdarjung Hospital.13. Another aspect which requires mention is that the SCDRC had held that Safdarjung Hospital was not amenable to the jurisdiction created by the Act. This was not challenged by the complainant. Sarvodaya Hospital challenged the order of the SCDRC. The NCDRC reversed the finding on maintainability which was in favour of Safdarjung Hospital in a revision by Sarvodaya Hospital. It attempted to do complete justice, ignoring that it is not entrusted with the jurisdiction which is exclusively conferred on this Court Under Article 142