(AIR 2007 SC 1819)

 The question that was raised in the present case was “Whether the services rendered by an ESI hospital is gratuitous or not, and consequently whether it falls within the ambit of ‘services’ as defined in the Consumer Protection Act, 1986.”

 The court noted that the definition of ‘consumer’ in the Consumer Protection Act is apparently wide enough and encompasses within its fold not only the goods but also the services, bought or hired, for consideration. Such consideration may be paid or promised or partly paid or partly promised under any system of deferred payment and includes any beneficiary of such person other than the person who hires the service for consideration.

 It was observed that as per the ESI Act 1948, 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.

 “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.”

  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 Consumer Protection Act.

 The court relied on Indian Medical Association v. V.P. Shantha and Ors. (AIR1996SC550);   to the facts of the present case, where the appellant has availed the services under the insurance policy which is compulsory under the statute. The court was of the view in the 1996 judgment that 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 Consumer Protection Act. It cannot be said to be a free service rendered by the ESI hospital/dispensary

 In the present case the court held that the . ESI scheme is an insurance scheme and it contributes 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.

-Akshara  Sharma