Holding

The medical services rendered under the ESI scheme are not gratuitous, the appellant is a consumer, and the consumer forum retains jurisdiction to entertain the claim for damages, which is not excluded by the Employees' State Insurance Act.

Summary

Kishore Lal, an employee insured under the Employees' State Insurance (ESI) scheme, complained that his wife received negligent medical treatment at an ESI dispensary, leading to her condition worsening. He filed a complaint before the District Consumer Disputes Redressal Forum seeking compensation for negligence, but the forum dismissed the case on the ground that the medical service was gratuitous and thus outside the Consumer Protection Act, 1986. The respondent ESI Corporation argued that the dispute fell exclusively within the jurisdiction of the Employees' Insurance Court under Sections 74 and 75 of the ESI Act. The Supreme Court held that services rendered under the ESI insurance scheme are not free, as the costs are borne by contributions from employer and employee, making them services for consideration under the Consumer Protection Act. Consequently, Kishore Lal qualifies as a consumer, and the consumer forum has jurisdiction to entertain the claim for damages, which is not barred by the ESI Act. The appeal was allowed, setting aside the lower courts' orders and remitting the matter back to the District Forum for adjudication.

Issues considered

Whether medical services provided by an ESI hospital/dispensary are gratuitous or constitute a service for consideration under the Consumer Protection Act, 1986.
Whether the appellant qualifies as a 'consumer' within the meaning of Section 2(d) of the Consumer Protection Act.
Whether Section 74 and Section 75 of the Employees' State Insurance Act, 1948 oust the jurisdiction of the consumer forum in a claim for damages arising from medical negligence.
Whether a claim for damages for medical negligence falls within the jurisdiction of the Employees' Insurance Court.

Legislation cited

Consumer Protection Act, 1986s. 2(d), s. 2(o)
Employees' State Insurance Act, 1948s. 74, s. 75
Employees' State Insurance (Central) Rules, 1950

Subjects

consumer protectionmedical negligenceEmployees' State Insurance Actjurisdictionconsumer forumgratuitous serviceinsurance schemedamages

Judgment

..
' KISHORELAL A
v.
CHAIRMAN, E.S.I. CORPORATION

MAY 8, 2007

[B.N. AGRA WAL, P.P. NAOLEKARAND DALVEER BHANDARI, JJ.] B

' . Consumer Protection Act, 1986-Ss. 2(d) and 2(o)-Employees' State
Insurance Act, 1948-ss. 74 and 75-Employees' State Insurance (Central)
Rules, 1950-Medical negligence-Claim of compensation by complainant
for deficiency in service by ES! hospital before Consumer Forum-Dismissal
c
of the complaint holding that the complainant is not a 'consumer' under the
Consumer Protection Act since the medical service rendered is gratuitous in
nature-Correctness of-Jurisdiction of Employees' State Insurance Court in
dealing with compensation for medical negligence-Held, medical service
rendered by ESJ hospital is not gratuitous in nature since the expenses are D
reimbursed by contributions under the Act of 1948-Hence, the Consumer
~ Forum has jurisdiction to deal with deficiency in service-Employees'
r Insurance Court does not have jurisdiction under the Act of 1948 to deal
with claim for damages for medical negligence.

Appellant was insured with respondent-Corporation. The appellant's wife E
was admitted in the respondent's dispensary for her treatment for diabetes.
When her condition deteriorated, the appellant got his wife medically examined
in a private hospital. The medical tests done revealed that the deterioration in
condition of his wife was due to wrong diagnosis and treatment in the
respondent's dispensary. The appellant-complainant filed a complaint under
F
the Consumer Protection Act, 1986 before District Forum claiming
;t._ compensation. The respondent raised preliminary objections contending that
the appellant is not a 'consumer' under the Act since the medical service
rendered by the respondent's dispensary is gratuitous in nature. The District
Forum dismissed the complaint upholding the contention of the respondent.
State Commission and National Commission dismissed the appeals of the G
appellant.

In appeal to this Court, the appellant contended that the medical services
I ,,..., rendered by the respondent's hospital cannot be said to be gratuitous in nature

139 H
140 SUPREME COURT REPORTS [2007) 6 S.C.R.
;-
't
A since the expenses are reimbursed as he is a member of an insurance scheme
applicable in the establishment under the Employees' State Insurance Act
where he is serving and therefore, the insurance policy which takes care of
the medical treatment of the appellant as well as his dependants which is given
in the respondent's dispensary, would be a service falling within the purview
of Section 2(l)(o) of the Consumer Protection Act, 1986; that this Court in
B Indian Medical Association had held that any medical service given under a
scheme of insurance fall within the purview of the Act and hence, the appellant
is a 'consumer' under the Act.

The respondent-Corporation contended that the appellant is not a
c 'consumer' under the Act since the medical service rendered by the
respondent's dispensary is gratuitous in nature; and that by virtue of Section
74 read with section 75 of the Employees State Insurance Act, 1948, the claim
made by the appellant would exclusively fall for decision within the jurisdiction
of the Employees' Insurance Court established under the Insurance Act; and
that since the Insurance Act is a special Act, the Consumer Forum has no
D jurisdiction to adjudicate upon the issue.

Allowing the appeal, the Court ~

HELD:l.1. On a plain reading of the provisions of the Employees' State
Insurance Act, 1948, it is apparent that the respondent-Corporation is
"
E 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 expenses 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 Indian
F
Medical Association v. V.P. Shantha & Ors.. (1995) 6 SCC 651 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
G the Consumer Protection Act, 1986. It cannot be said to be a free service
rendered by the respondent's dispensary. [Para 13) [150-C, D, E)

Indian Medical Association v. V.P. Shantha & Ors., (1995) 6 SCC 651,
relied on. / ...
H Laxman Thamappa Kotgiri v. G.M Central Railway & Ors., [2005) 1
KISHORE LAL v. CHAIRMAN, E.S.I. COPRN. 141
SCALE 600 and Regional Provident Fund Commissioner v. Shiv Kumar Joshi, A
(2000) l sec 98, referred to.

Birbal Singh v. ES/ Corporation, (1993) II CPJ 1028, referred to.

2.1. The jurisdiction of the Consumer Forum should not and would not
be curtailed unless there is an express provision prohibiting the consumer B
forum to take up the matter which falls within the jurisdiction of civil court
or any other forum as established under some enactment. If two different fora
' 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.
c
(Para 17) [153-B, CJ

Mis Spring Meadows Hospital & Anr. v. Harjo/ Ahluwalia & Anr., AIR
(1998) SC 1801; State of Karnataka v. Vishwabarathi House Building Co-
op. Society & Ors., AIR (2003) SC 1043 and Secretary, Thirumugam
Cooperative Agricultural Credit Society v. M Lalitha & Ors., [2004) 1 SCC D
305, referred to.

2.2. The appellant's claim has no relation to any of the benefits which
are provided in Employees' State Insurance (Central) Rules, 1950 framed
under the Employees' State Insurance Act, 1948 for which claim can be made
in the Employees' Insurance Court. The appellant's claim is for damages for E
the negligence on the part of the respondent's dispensary. A bare perusal of
the provisions of Section 75 of the Act clearly shows that it does not include
claim for damages for medical negligence. [Paras 18 and 19) (153-G; 154-A)

2.3. Cause of action for negligence arises only when damage occurs F
and thus the claimant has to satisfy the court three ingredients viz. existence
.. of duty to take care; failure to attain that standard of care; and damage suffered
' on account of breach of duty. This 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 G
beyond the jurisdictional power of the Employees' Insurance Court. A bare
· reading of Section 75(2) of the Employees' State Insurance Act, 1948 does
not indicate that the claim for damages for negligence would fall within the
purview of the decisions being made by the Employees' Insurance Court.
Further, any claim arising out of and within the purview of the Employees' H
142 SUPREME COURT REPORTS [2007] 6 S.C.R.

A Insurance Court is expressly barred by virtue of section 75(3) of the Act 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 section 75(a) to (g) of the Act or where the
jurisdiction to adjudicate upon the claim is vested with the Employees'
B Insurance Court under section 75(2)(a) to (f) if it is a consumer's dispute
falling under the Consumer Protection Act. [Para 201 [154-F, G; 155-A, Bl

Jacob Mathew v. State of Punjab & Anr., [2005) 6 SCC I, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4965 of2000.

C From the Judgment and Order dated 19.04.1999 of the National Consumer
Disputes Redressal Commission, New Delhi in Revision Petition No. 606 of
1996.

Gopal Subramaniam, (A.C.), Dayan Krishnan, Nikhil Nayyar and Gautam
D Narayan for the Appellant.

Vijay K. Mehta for the Respondent.

The Judgment of the Court was delivered by

P.P. NAOLEKAR, J. 1. The appellant was insured with the respondent-
E 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
F 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
G 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;
H (ii) direction for removal of, and improvement in, the deficiencies; and (iii)
KISHORE LAL v. CHAIRMAN, E.S.I. COPRN. [P.P. NAOLEKAR, J.] 143
direction for payment of interest on the amount of reimbursement bills. The A
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 B
'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 Birba/ Singh v.
c
ES/ Corporation, (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 D
medical services provided. On this basis, the District Forum held that the
services rendered by the ESI dispensary are gratuitous in nature and, therefore,
~

y· 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
E
Corporation was not gratuitous. The State Commission relying on the judgment
in Birba/ Singh (supra) and Indian Medical Association v. V.P. Shantha and
Ors., [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 revisio'l before the National Consumer Disputes Redressal Commission, but
the same was also dismissed in limine. Hence, this appeal by special leave. F

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 G
it being a special Act the jurisdiction of the consumer forum is ousted.

4. From the decisions rendered by the District Forum, the State
·-' ·Commission and the National Commission, and the questions raised by the
appellant and the respondent, the question that falls for our consideration is
H
144 SUPREME COURT REPORTS [2007] 6 S.C.R.

A two-fold:
I. Whether the service rendered by an ES! hospital is gratuitous or
not, and consequently whether it falls within the ambit of 'service' as
defined in the Consumer Protection Act, 1986?

B 2. Whether Section 74 read with Section 75 of the Employees' State
Insurance Act, 1948 ousts the jurisdiction of the consumer forum as
regards the issues involved for consideration?

5. It is contended by Shri Dayan Krishnan, the learned counsel for the
appellant, that in the case of Indian Medical Association (supra} although
C it was held that the free medical service was not covered under the CP Act,
the very same judgment in conclusion No. (11) in para 55 includes any medical
service given under the scheme of insurance within the scope of the CP Act
and, therefore, the claim made by the appellant squarely falls within the
jurisdiction of the consumer forum, the appellant being a consumer and the
respondent's dispensary having rendered a service to him for consideration.
D
6. At this stage, it would be appropriate to refer to certain statutory
provisions of the Consumer Protection Act, 1986. 'Consumer' is defined in
clause (d) and 'service' in clause (o) of Section 2(1) of the CP Act as under:

"2. Definitions.- (I) Jn this Act, unless the context otherwise requires,-
E
xxx xxx

(d) "consumer" means any person who, -
(i) buys any goods for consideration which has been paid or
promised or partly paid and partly promised, or under any system
F of deferred payment and includes any user of such goods other
than the person who buys such goods for consideration paid or
promised or partly paid or partly promised, or under any system
of deferred payment, when such use is made with the approval
of such person, but does not include a person who obtains such
G goods for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration which has
been paid or promised or partly paid and partly promised, or
under any system of deferred payment and includes any
beneficiary of such services other than the person who hires or /'-
H avails of the services for consideration paid or promised, or
K!SHORE LAL v. CHAIRMAN, E.S.l. COPRN. [P.P. NAOLEKAR, J.] 145
1
partly paid and partly promised, or under any system of deferred A
payment, when such services are availed of with the approval of
the first mentioned person but does not include a person who
avails of such services for any commercial purpose;

Explanation.- For the purposes of this clause, "commercial purpose"
does not include_ use by a person of goods bought and used by him B
and services availed by him exclusively for the purposes of earning
his livelihood by means of self-employment;"
).
\
xxx xxx xxx

"(o) "Service" means service of any description which is made available C
to potential users and includes, but not limited to, 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 the rendering of
any service free of charge or under a contract of personal service;" D

7. The definition of' consumer' in the CP 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 E
service for consideration. The Act being a beneficial legislation, aims to
protect the interests of a consumer as understood in the business parlance.
The important characteristics of goods and services under the Act are that
they are supplied at a price to cover the costs and generate profit or income
for the seller of goods or provider of services. The comprehensive definition F
aims at covering every man who pays money as the price or cost of goods
and services. However, by virtue of the definition, the person who obtains
goods for resale or for any commercial purpose is excluded, but the services
hired for consideration even for commercial purposes are not excluded. The
term 'service' unambiguously indicates in the definition that the definition is
not restrictive and includes within its ambit such services as well which are G
specified therein. However, a service hired or availed, which does not cost
anything or can be said free of charge, or under a contract of personal service,
is not included within the meaning of 'service' for the purposes of the CP Act.

8. A 3-Judge Bench of this Court in Indian Medical Association (supra) H
146 SUPREME COURT REPORTS (2007) 6 S.C.R.

A has extensively considered the provisions of the CP Act and particularly what
shall be a 'service' within the meaning of Section 2(l)(o) of the said Act. The
Court was considering whether the service rendered by the doctors would fall
within the purview of the CP Act, it being a service rendered for the charges;
and whether the patients, who are treated by the doctors, are 'consumers' as
defined in Section 2(l)(d) of the CP Act. The Court said that the definition
B of' service' in Section 2( I)(o) can be split into three parts: the main part, the
inclusionary part and the exclusionary part. The main part is explanatory in
nature and defines service to mean service of any description which is made
available to the potential users. The inclusionary part expressly includes the
provision of facilities in connection with banking, financing, insurance,
C 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, whereas the exclusionary part excludes rendering
of any service free of charge or under a contract of personal service. The
exclusionary part in Section 2( I)(o) excludes from the main part service rendered
(i) free of charge; or (ii) under a contract of personal service. The expression
D 'contract of personal service' in the exclusionary part of Section 2(l)(o) must
be construed as excluding the services rendered by an employee to his
employer under the contract of personal service from the ambit of the
expression 'service'. There is a distinction between a 'contract of service' and
a 'contract for service'. A 'contract for service' implies a contract whereby
E one party undertakes to render service e.g. professional or technical service,
to or for another in the performance of which he is not subject to detailed
direction and control and exercises professional or technical skill and uses his
own knowledge and discretion, whereas a ·contract of service' implies
relationship of master and servant and involves an obligation to obey orders
in the work to be performed and as to its mode and manner of performance.
F A contract of service is excluded for consideration from the ambit of definition
of 'service' in the CP Act, whereas a contract for service is included. As
regards service rendered free of charge under Section 2(1 )( o), the Court held
that the medical practitioners, government hospitals/nursing homes and private
hospitals/nursing homes, who render service without any charge whatsoever
G to every person availing of the service would not fall within the ambit of
'service' under Section 2(1)(o) of the Act. The payment of a token amount
for registration purposes only would, however, not alter the position in
respect of such doctors and hospitals, but the service rendered for which
charges are required to be paid by everybody availing the service would fall
within the purview of the expression 'service' as defined in Section 2(l)(o)
H of the Act. The Court held that the relationship between a medical practitioner
KISHORE LAL v. CHAIRMAN, E.S.I. COPRN. [P.P. NAOLEKAR, J.] 147
and a patient carries within it a certain degree of mutual confidence and trust A
"'' and, therefore, the service rendered by the medical practitioners can be
regarded as a service of personal nature, but since there is no relationship
of master and servant between the doctor and the patient the contract between
the medical practitioner and his patient cannot be treated as a contract of
personal service and it is a contract for service and the service rendered by
the medical practitioner tC' his patient under such contract is not covered by B
..- the exclusionary part of the definition of'service' contained in Section 2(1)(o)
of the CP Act. In paragraph 55 of the judgment, the Court summarized its
:! ~ conclusions. We are really concerned in this case with conclusions Nos. (9),
'\
(IO), (I I) and (12). Conclusion No. (9) is in regard to the service rendered at
'
a government hospital/health center/dispensary where no charges whatsoever c
are made from any person and they are given free service, which would not
be a service under Section 2(1 )(o) of the CP Act. Conclusion No. (I 0) lays
down that where the service is rendered at a government hospital/health
center/dispensary on payment of charges and also rendered free of charge,
then it would fall within the ambit of the expression ·service'. Conclusion No.
(I I) says that if a patient or his relation availed of the service of a medical D
practitioner or hospital/nursing home where the charges for consultation,
diagnosis and medical treatment are borne by the insurance company, then
-..;
such service would fall within the ambit of service. Similarly, under conclusion
r No. (12), where as a part of the conditions of service the employer bears the
expenses of medical treatment of an employee and his family members E
dependent on him, then the service rendered by a medical practitioner or a
hospital/nursing home would not be treated to be free of charge and would
constitute ·service' under Section 2( I)(o).

9. In the case of Laxman Thamappa Kotgiri v. G.M Central Railway
& Ors., (2005) I Scale 600, where an employee of the railways had filed a F
complaint on the ground that his wife had been negligently treated at a
hospital of the Central Railway as a result of which she had died, the State
t
Commission concluded that since the hospital had been set up to treat railway
employees predominantly and the service provided was free of charge it did
not come within the definition of 'service' under the CP Act and _hence the
complaint was not maintainable. On appeal to the National Commission, the
G
judgment of the State Commission was upheld and the appeal filed by the
employee was rejected. Thereafter, appeal was preferred to this Court. Allowing
the appeal, this Court in paras 6 and 7 has held as under:
-~,

"6. There is no dispute that the Hospital in question has been set up
H
148 SUPREME COURT REPORTS [2007] 6 S.C.R.

A for the purpose of granting medical treatment to the Railway employees ·V
and their dependents. Apart from the nominal charges which are taken
from such an employee, this facility is part of the service conditions
of the Railway employees. V.P. Shantha's case has made a distinction
between non-Governmental hospital/nursing home where no charge
whatsoever was made from any person availing of the service and all
B patients are given free service (vide para 55(6) at page 681) and ~
~

services rendered at Government Hospital/Health Centre/Dispensary
where no charge whatsoever is made from any person availing of the "
services and all patients are given free serv,ice (vide para 55(9)) on the
;'
,.
hand and service rendered to an employee and his family members by
c a medical practitioner or a hospital/nursing home which are given as
part of the conditions of service to the employee and where the
employer bears expenses of the medical treatment of the employee and
his family members, (paragraph 55(12) on the other. In the first two
circumstances, it would not be free service within the definition of the
Sec. 2C)(o) of the Act. In the third circumstance it would be.
D
7. Since it is not in dispute that the medical treatment in the said
Hospital is given to employees like the appellant and his family members
is part of the conditions of service of the appellant and that the >-
Hospital is run and subsidised by the appellants employer, namely, the ~

Union of India, the appellant's case would fall within the parameters
E laid down in paragraph 55(12) of the judgment in V.P. Shantha's case
and not within the parameters of either para 55(6) or para 55(9) of the
said case."

10. Further, the appellant has brought to our notice a judgment of this
Court in the case of Regional Provident Fund Commissioner v. Shiv Kumar
F
Joshi, [2000] l SCC 98, wherein the Employees' Provident Fund Scheme, 1952,
framed under Section 5 of the Employees' Provident Fund Act came for
consideration of the Court and the Court held in para 11 as under: . .,
"
G A perusal of the Scheme unambiguously shows that it is for
consideration which is applicable to all those factories and
establishments covered under the Act and the Scheme who are required
to become a member of the fund under the Scheme. The contribution
of the employee has to be equal to the contribution payable by the ?-

H employer in respect of such employee. The words "in respect of' are
KISHORE LAL v. CHAIRMAN, E.S.I. COPRN. [P.P. NAOLEKAR, J.] 149
,
· ..
significant as they indicate the liability of the employer to pay his part A
of the contribution in consideration of the employee working with him.
But for the employment of the employee there is no obligation upon
the employer to pay his part of the contribution to the Scheme. The
administrative charges, as required to be paid under Para 30 of the
Scheme are also paid for consideration of the employee being the B
member of the Scheme and for the services rendered under the Scheme.
It is immaterial as to whether such charges are deducted actually from
the wages of the employee or paid by his employer in respect of the
member-employee of the Scheme working for such employer. It cannot
be held that even though the employee is a member of the Scheme,
yet the employer would only be deemed to be a consumer for having C
made payments of the administrative charges ... "

11. It is contended by the learned counsel for the appellant :hat the
appellant is a member of the insurance scheme applicable in the establishment
where he is serving and, therefore, the insurance policy which takes care of
the medical treatment of the appellant as well as his dependents which is D
given in the ESI hospital/dispensary would be a service falling within the
purview of Section 2(l)(o) of the CP Act. To appreciate this contention of the
learned counsel, it would be necessary to consider the insurance scheme
which is applicable in the establishment under various provisions of the ESI
~ E
12. It is an admitted fact that the appellant's wife was given treatment
in the ES! dispensary 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 F
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 the employee's contribution, in the first G
instance of the employees directly employed by him or by or through an
immediate employer. Sub-section (2) of Section 40 authorises the principal
employer to recover the contribution made for the employee by deducting the
same from the wages of the employee. Chapter V of the ES! Act deals with
benefits. Sub-section (I) of Section 46 falling within this Chapter contemplates
that the ins• ired persons, their dependents and the persons mentioned under H
150 SUPREME COURT REPORTS (2007] 6 S.C.R.

A the Section shall be entitled to the various benefits referred to in clauses (a) y
to (t). Clause (e) reads: "medical treatment for an attendance on insured
persons (hereinafter referred to as medical benefit)". 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
B 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 maintain 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 benefit is extended, to their families.

C 13. On a plain reading of the aforesaid provisions of the ES! 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
D scheme by the employer and the employee and, therefore, the principle
enunciated in conclusion No. (I I) 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
E borne under the insurance policy, it would be a service rendered within the
ambit of Section 2(l)(o) of the CP Act. It cannot be said to be a free service
rendered by the ES! hospital/dispensary.

14. The service rendered by the medical practitioners of hospitals/
nursing homes run by the ES! Corporation cannot be regarded as a service
F 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(l)(o) of the CP Act. We are of
the opinion that the service provided by the ES! hospital/dispensary falls
G within the ambit of 'service' as defined in Section 2(l)(o) of the CP Act. ES!
scheme is an insurance scheme and it contributes for the service rendered by
the ES! hospitals/dispensaries, of medical care in its hospitals/dispensaries,
and as such service given in the ES! hospitals/dispensaries to a member of
the Scheme or his family cannot be treated as gratuitous.

H 15. We shall now proceed to consider the second question raised by
KISHORE LAL v. CHAIRMAN, E.S.l. COPRN. [P.P. NAOLEKAR, J.) 151
' Shri Vijay K. Mehta, the learned counsel for the respondent that by virtue of A
Section 74 read with Section 75, and particularly Section 75(e), of the ESI Act,
the claim made by the appellant would exclusively fall for decision within the
jurisdiction of the Employees' Insurance Court and that being the position the
consumer forum has no jurisdiction to adjudicate upon the issue.

16. Relevant portions of Sections 74 and 75 of the ES! Act are reproduced B
below:

) . "74. Constitution of Employees' Insurance Court.-{ I) The State
"\
Government shall, by notification in the Official Gazette, constitute an
Employees' Insurance Court of such local area as may be specified in
the notification. C
xxx xxx"

"75. Matters to be decided by Employees' Insurance Court.- (I) If any
question or dispute arises as to
D
(a) whether any person is an employee within the meaning of this
Act or whether he is liable to pay the employee's contribution,
or
(b) the rate of wages or average daily wages of an employee for
the purpose of this Act, or E
(c) the rate of contribution payable by the principal employer in
respect of any employee, or
(d) the person who is or was the principal employer in respect
of any employee, or
(e) the right of any person to any benefit and as to the amount F
and duration thereof, or
(ee) any direction issued by the Corporation under Section 55-
A on a review of any payment of dependants' benefits, or,
(t) [Omitted), or G
(g) any other matter which is in dispute between a principal
employer and the Corporation, or between a principal employer
and an immediate employer, or between a person and the
Corporation or between an employee and a principal or immediate
employer, in respect of any contribution or benefit or other dues H
152 SUPREME COURT REPORTS [2007] 6 S.C.R.

A payable or recoverable under this Act, or any other matter required
to be or which may be decided by the Employees' Insurance
Court under this Act,

such question or dispute subject to the provisions of sub-section (2-
A) shall be decided by the Employees' Insurance Court in accordance
B with the provisions of this Act.

(2) Subject to the provisions of sub-section (2-A), the following
claims shall be decided by the Employees' Insurance Court, namely,-
I
(a) claim for the recovery of contributions from the principal /

employer;
c
(b) claim by a principal employer to recover contributions from
any immediate employer;
(c) (Omitted);
(d) claim against a principal employer under Section 68;
D
(e) claim under Section 70 for the recovery of the value or amount
of the benefits received by a person when he is not lawfully
entitled thereto; and
(t) any claim for the recovery of any benefit admissible under this '
E Act.
xxx xxx xxx
(3). No Civil Court shall have jurisdiction to decide or deal with
any question or dispute as aforesaid or to adjudicate on any liability
which by or under this Act is to be decided by a medical board, or
F by a medical appeal tribunal or by the Employees' Insurance Court."

17. It has been held in numerous cases of this Court that the jurisdiction ..
of a consumer forum has to be construed liberally so as to bring many cases
under it for their speedy disposal. In the case of Mis. Spring Meadows
G Hospital and Anr. v. Harjo/ Ahluwalia and Anr., AIR (1998) SC 1801, it was
held that the CP Act creates a fr~mework 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 Ors., AIR (2003) SC 1043, the Court speaking on the
H jurisdiction of the consumer fora held that the provisions of the said Act are
KISHORE LAL v. CHAIRMAN, E.S.I. COPRN. [P.P. NAOLEKAR, J.] 153

required to be interpreted as broadly as possible and the fora under the CP A
Act have jurisdiction to entertain a complaint despite the fact that other fora/
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
Ors., [2004] 1 SCC 305. The trend of the decisions of this Court is that the B
jurisdiction of the 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 fora have jurisdiction to entertain the dispute
in regard to the same subject, the jurisdiction of the consumer forum would C
not be barred and the power of the consumer forum to adjudicate upon the
dispute could not be negated.

18. The submission of the learned counsel for the respondent is that the
claim made by the appellant before the consumer forum raises a dispute in
regard to damages for negligence of doctors in the ES! hospital/dispensary D
and would tantamount to claiming benefit and the amount under the ES! Act
provisions and would fall within clause (e) of Section 75(1) and, therefore, it
is the Employees' Insurance Court alone which has the jurisdiction to decide
it. We are afraid that we cannot agree with the submission made by the
learned counsel. Section 75 provides for the subjects on which the jurisdiction E
shall be exercised by the Employees' Insurance Court. Clause (e) of Section
75(1) gives power to the Employees' Insurance Court to adjudicate upon the
dispute of the right of any person to any benefit and as to the amount and
duration thereof. The benefit which has been referred to, has a reference to
the benefits under the Act, i.e., the ES! Act. The Employees' State Insurance
(Central) Rules, 1950 (hereinafter referred to as "the Rules") have been framed F
in exercise of the powers under Section 95 of the ESI Act. Rule 56 provides
for maternity benefits, Rule 57 for disablement benefits, Rule 58 for dependents'
benefits, Rule 60 for medical benefits to insured person who ceases to be in
an insurable employment on account of permanent disablement and Rule 61
for medical benefits to retired insured persons. Thus, these are the benefits G
which are provided under the Rules to the employees and the ex-employees
for which claim can be made in rhe Employees' Insurance Court. The appellant's
claim has no relation to any of the benefits which are provided in the Rules
for which the claim can be made in the Employees' Insurance Court. The
appellant's claim is for damages for the negligence on the part of the ESI
hospital/dispensary and the doctors working therein. H
154 SUPREME COURT REPORTS [2007) 6 S.C.R.

A 19. A bare perusal of the provisions of clauses (a) to (g) of Section 75(1) -11-
clearly shows that it does not include claim for damages for medical negligence,
like the present case which we are dealing with. Although the question does
not directly arise before us, we shall consider what in the ordinary course
shall constitute negligence.

B 20. This Court has considered the principles of the law on negligence
in Jacob Mathew v. State of Punjab and Anr., [2005] 6 SCC I. 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-
C 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
D 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 care on
E the part of the party complained of towards the party complaining the
farmer'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."

F 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 care; and (c) damage suffered on account of breach of duty, are
present for the defendant to be held liable for negligence. Therefore, the
G 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 ES! hospital/
dispensary is clearly beyond the jurisdictional power of the Employees'
H
KISHORE LAL v. CHAIRMAN, E.S.I. COPRN. (P.P. NAOLEKAR, J.) 155
A
Insurance Court. An Employees' Insurance Court has jurisdiction to decide
certain claims which fall under sub-section (2) of Section 75 of the ES! 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 Employees' Insurance Court. Further, it can be
seen that any claim arising out of and within the purview of the Employees' B
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 C
Employees' 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.

21. Having considered all these aspects, we are of the view that the
appellant is a consumer within the ambit of Section 2(l)(d) of the Consumer
Protection Act, 1986 and the medical service rendered in the ES! hospital/ D
dispensary by the respondent Corporation falls within the ambit of Section
1( 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. E
22. For the aforesaid reasons, the appeal is allowed. The impugned
order is set aside and the matter is remitted back to the District Consumer
Disputes Redressal Forum, Sonepat, for decision in accordance with law laid
down herein.
F
B.S. Appeal allowed.