Case BriefsTribunals/Commissions/Regulatory Bodies

Consumer Disputes Redressal Commission, Gujarat State, Ahmedabad: Noting the fact that a patients Kidney was removed instead of the stones in the Kidney, Dr J.G. Mecwan (Presiding Member) expressing its’ opinion on medical negligence and hospital’s vicarious liability expressed that,

Hospital is liable with respect to medical negligence that may be direct liability or vicarious liability which means the liability of an employer for the negligent act of its employees.

Facts in Nutshell

Complainant stated that the present appellant was a hospital run by a charitable trust and Dr Shivubhai Patel was working as a Medical Officer/surgeon at the KMG General Hospital.

Complainant’s case was that the husband of the complainant approached the opponent with the complaint of back pain and difficulty in urination in the K.G.M Hospital and thereafter the Surgeon examined him and advised for USG. In the USG report it was revealed that the deceased’s left kidney was maltreated and therefore he was advised to go to some higher center for operation but as the complainant was unable to go there due to his financial condition, necessary medicines were prescribed by the opponent Doctor.

Complainant visited the opponent hospital with unbearable pain and therefore, a special investigation was done and the report was suggestive of 14mm stone with obstruction at P.U.J in left kidney and the right kidney was normal.

It is further submitted by the complainant that the operation was performed for removal of the stone from the kidney but instead of stone, the Kidney was removed by Dr Patel without any consent of her husband.

After the above incident, patient’s condition worsened, and he eventually died and therefore the complainant filed a consumer complaint against the opponent for gross medical negligence and deficiency in service before the District Commission.

District Commission partly allowed the complaint of the complainant.

Being aggrieved by the impugned order of the District Commission, Nadiad the original opponent 02 has filed the present appeal against the original complainant before this Commission.

Main Consideration:

Opponent Doctor removed the Kidney instead of removing the stone from the kidney.

Opponent 3 – Insurance Company contended that Opponent 2 Hospital had taken an insurance policy for the legal liability and therefore OP-3 was not at all liable for the payment of the medical negligence for the opponent Doctor i.e. employee of the opponent 2 Hospital.

Commission noted that that the policy was taken for legal liability for the indoor patients and outdoor patients of the hospital and therefore in the opinion of this Commission when policy was taken for the legal liability of the indoor and outdoor patients and not taken for professional Indemnity then medical negligence for the opponent 01 doctor i.e. employee of the opponent 02 – Hospital, Insurance Company cannot be held liable to make payment.

Hospital’s Liability

Coram expressed that Hospital was liable with respect to medical negligence that may be direct liability or vicarious liability which means the liability of an employer for the negligent act of its employees.

An employer is responsible not only for his own acts of commission and omission but also for the negligence of its employees, so long as the act occurs within the course and scope of their employment. This liability is according to the principle of ‘respondent superior’ meaning ‘let the master answer’.

Concluding the matter, the Commission held that when Doctor is liable for the act of medical negligence then the Hospital is also vicariously liable for the act of Doctor and therefore District Commission Order was not just and proper, hence was modified as under:

“Opponent No. 02 – K.M.G. General Hospital is hereby ordered to pay Rs. 11,23,000/-(Rupees Eleven Lac Twenty Three Thousand Only), to the complainant with interest at the rate of 7.5% from the date of filing of the compliant till its realization and also ordered to pay Rs. 5000/- (Rupees Five Thousand Only) towards mental agony and cost of the complaint.”

[KMG General Hospital v. Devendrabhai K. Raval, Appeal No. 1457 of 2013, decided on 7-10-2021]


Advocates before the Commission:

Mr M.K. Joshi, L.A. for the appellants,

Mr V.K. Bhatt, L.A. for respondent no. 01, Mr M.K. Joshi, L.A. for respondent no. 02,

Mr. V.P. Nanavaty, L.A. for the respondent no. 03.

Case BriefsDistrict Court

Tis Hazari Courts, New Delhi: Devanshu Sajlan, MM NI Act-05, while noting the ingredients of Section 138 of the Negotiable Instruments Act, 1881 acquitted a person charged for offence punishable under Section 138 NI Act.

Factual Matrix

Present complaint was filed under Section 138 of the Negotiable Instruments Act, 1881.

Complainant had granted a friendly loan of Rs 21,00,000 to the accused for two months for some urgent need of the accused.

To discharge the legal liability, the accused issued two cheques in favour of the complainant firm, but the same were returned by the bank as no balance was available in the account. Thereafter, Complainant sent a legal notice but the accused allegedly failed to pay the cheque amount and hence, the complainant filed the present complaint.

Accused denied having taken a loan of Rs 21,00,000 from the complainant and instead stated that he took a loan of Rs 5,00,000 and had already paid the same. He added that he had given three blank signed cheques as security cheques which were misused by the complainant.

Discussion

In the present matter, the complainant proved the original cheques that the accused had not disputed as being drawn on the account of the accused.

Court stated that giving a blank signed cheque does not erase the liability under the NI Act. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may subsequently fill up the amount and other particulars (Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, ¶ 34).). The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability.

Legal Notice

It is settled law that an accused who claims that she/he did not receive the legal notice, can, within 15 days of receipt of summons from the court, make payment of the cheque amount, and an accused who does not make such payment cannot contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the General Clauses Act and Section 114 of the Evidence Act [C.C. Alavi Haji v. Palapetty Muhammed, (2007) 6 SCC 555).

Maintainability | Complainant is an unregistered partnership firm

It was contended that the present complaint was barred under Section 69(2) of the Indian Partnership Act. The firm was unregistered and hence the complaint was barred under the stated section.

A simpliciter reading of Section 69(2) would show that it is intended to apply to only suits, and that it would have no application to a criminal complaint.

Hence, the bar imposed on unregistered firms under Section 69(2) of the Indian Partnership Act does not apply to a criminal complaint under Section 138 NI Act.

Non-Existence of Debt

Complainant is required to prove that the cheque in question was drawn by the drawer for discharging a legally enforceable debt.

Court stated that as per the NI Act, once the accused admits signature in the cheque in question, certain presumptions are drawn, which result in shifting of onus on the accused and in the present matter, the issuance of cheques was not denied.

The combined effect of Section 118(a) NI Act and Section 139 of the NI Act is that a presumption exists that the cheque was drawn for consideration and given by the accused of the discharge of debt or other liability.

Rebuttal

  • Misuse of the security cheque

Bench stated that it is immaterial whether the cheque had been filled by the complainant once the cheque has been admitted being duly signed by the drawer-accused.

  • Complainant did not have the financial capacity to grant the alleged loan

It is a settled position of law that in case of cash transaction, showcasing that complainant did not have the adequate financial capacity to lend money to the accused amounts to a probable defense and can help in rebutting the presumption that is accrued to the benefit of the complainant in cheque dishonor cases.

In Basalingappa v. Mudibasappa, (2019) 5 SCC 418, the Supreme Court has observed as follows:

During his cross-examination, when financial capacity to pay Rs. 6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant. The evidence on record, thus, is a probable defence on behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts.

(emphasis added)

Hence, the Court stated that in cases in which the underlying debt transaction is a cash transaction, the accused can raise a probable defense by questioning the financial capacity of the complainant, and once the said question is raised, the onus shifts on the complainant to prove his financial capacity.

Bench on perusal of the record of the present case, agreed with the submission of the counsel of the accused, since the record created adequate doubts over the financial capacity of the complainant to advance the loan in question.

Conclusion

Hence, Court opined that the complainant failed to establish that it had the financial capacity to advance a loan of Rs 21,00,000 to the accused.

Therefore, accused successfully rebutted the presumption under Section 139 NI Act and the complainant failed to discharge the shifted onus.

“…even if the cheque presented by the complainant was returned unpaid by the bank, the complainant cannot prosecute the accused, as the requirement of the existence of legal liability has not been satisfied in the present case, since the accused has been able to establish a probable defence by creating a credible doubt over the existence of the alleged loan transaction.”

Concluding the matter, Bench held that complainant failed to prove the case beyond a reasonable doubt, hence the accused was acquitted from the charge of offence punishable under Section 138 of the NI Act. [S.S. Auto Gallery v. Vaneet Singh, 21636 of 2016, decided on 9-10-2021]


Advocates before the Court:

Manjeet Singh, counsel for the complainant.

D.K Ahuja, for the accused.

Op EdsOP. ED.

I. Introduction

“Tort” is a wrongful act or an infringement of a right leading to legal liability for which civil courts award compensation. The law of Torts is an uncodified law which is based on equity, justice and good conscience.

In its incipient stage, the English legal system was haphazard and was conducted on a case-to-case basis. Judges were asked to travel in each relevant region to comprehend the local laws which had developed over two centuries. Subsequently, based on their findings, the English judiciary introduced and implemented the said laws, by way of judgments, into the English legal system, which are now called legal precedents. These precedents form a part of the Common Law system.

The law of torts in India is based on the principles of the English Common Law. However, it has been modified to meet the local requirements. Some of the important principles of torts include negligence, nuisance, trespass, vicarious liability, strict and absolute liability. In context of the present article, we shall focus upon the concepts of strict and absolute liability vis-à-vis the two notable industrial disasters in India.

a)  Doctrine of Strict Liability

The doctrine of “strict liability” evolved in  Fletcher v. Rylands[1]. In this case, Rylands hired contractors to build a reservoir on his land. While building it, the contractors discovered some flaws and left them unfixed. After some time, Rylands’s reservoir burst and flooded Fletcher’s adjoining mine causing £937 worth of damage.  Blackburn, J. opined that any person who for his own purposes brings on his land and collects and keeps there anything likely to do mischief, if it escapes must keep it at his peril and if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape[2].

b) Doctrine of Absolute Liability

The principle of “absolute liability” was first ever applied by the Supreme Court of India in M.C. Mehta v. Union of India [3](popularly known as Oleum gas leak case). In this case, oleum gas leaked from a fertilizer plant of Shriram Foods and Fertilizers, Delhi and caused damage to several people. A pending public interest litigation (PIL) by M.C. Mehta provided the opportunity to the Court to pass a series of orders dealing with the after-effects of gas leak. In this case, the Court disapproved the application of the principle of strict liability. The Supreme Court opined that:

an enterprise which is engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non-delegable duty to the community to ensure that no harm results to anyone on account of hazardous or inherently dangerous nature of the activity which it has undertaken. The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results on account of such activity, the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enterprise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part.”[4]

II. Bhopal Gas Tragedy

Union Carbide India Limited’s (UCIL) plant at Bhopal was designed by its holding company Union Carbide Corporation (UCC), USA and was built in 1969 for making pesticides, produced by reacting Methyl Isocyanate and Alpha Naphthol. An incident of gas leak took place in the Bhopal pesticide plant of UCIL on the night of 2-3 December, 1984 causing severe loss to the lives of people in the vicinity. People were exposed to this gas all around the city and the immediate effects were coughing, vomiting, severe eye irritation and a feeling of suffocation. Thousands of people died immediately, and lakhs of people sustained permanent injuries.

The doctrine of “absolute liability” was invoked in this case. In cases, where absolute liability is considered, liability of the company can be fixed even if there is no negligence on the part of the accused company.

In addition to the aforesaid, the Indian Government filed a case in the US Court for a claim of $3.3 billon against Union Carbide Corporation. By 1986 all these litigations in the US District were transferred to India on the grounds of forum non conveniens.[5]

Meanwhile, the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985[6] was passed by Parliament  to confer certain powers on the Central Government to secure that claims arising out of, or connected with, the Bhopal gas leak disaster, are dealt with speedily, effectively, equitably and to the best advantage of the claimants and for matters incidental thereto. This Act made the Union Government representative of the victims of the tragedy and allowed them to file suits on their behalf. Along with this, an out of court settlement between the Government of India and Union Carbide was arrived at, which fixed the liability of the company to pay $470 million as per the full and final settlement of all claims, rights and liabilities arising out of that disaster. All in all, it was a bad move, as the settlement limited the liabilities for the claims which were filed later. It is a hard fact, but it is as clear as broad daylight that $470 million dollars were not sufficient to compensate all the injured. In fact, it is hardly 15% of the original claim of $3.3 billion.

The compensation awarded was around Rs. 1 lakh for the families of the people who lost their lives, Rs. 50,000 for permanently injured and Rs. 25,000 for temporarily injured.

III. Vizag Gas Tragedy

A similar incident of gas leak happened recently in Vishakhapatnam (Vizag), Andhra Pradesh on 7th May, 2020. Styrene gas leaked from the chemical plant owned by a South Korean company LG Polymers India Private Ltd. with similar repercussions on lives of the people living in the vicinity. The immediate worry was that this may be a repetition of the Bhopal Gas Tragedy of 1984. People in the neighbouring areas were evacuated immediately for preventing the damage. Even though this gas leakage was less dangerous than the leak at the Union Carbide factory in Bhopal, 13 people still lost their lives and many people were affected by it.

The Andhra Pradesh Government announced compensation of Rs. 1 Crore to the families of the people who had lost their lives, Rs. 10 Lakhs to the victims undergoing treatment on ventilators and Rs. 1 Lakh to the other victims who were hospitalised. It was made clear by the Government that the aforesaid compensation would be in addition to the compensation by LG Polymers.

Furthermore, the High Court of Andhra Pradesh took suo motu cognizance of the incident and  vide order dated 07-05-2020[7],  directed the State to take all necessary steps to mitigate the loss that may be caused due to this incident. Consequently, the National Green Tribunal (NGT) also took suo motu cognizance of the incident and directed[8] the company to deposit an initial amount of Rs 50 crores with the District Magistrate, Visakhapatnam. The Civil Appeal[9] preferred against this Order before the Supreme Court has been kept pending. However the Supreme Court neither issued notice nor, did it interfere with impugned order of the NGT.

The National Green Tribunal invoked the principle of ‘strict liability’ against LG Polymers for adversely affecting the public health and environment through its failures. However, in our opinion, considering the facts and circumstances of the case of LG Polymers, it is evident that the nature of the substance used and the activities of both the companies (UCIL and LGPI) are similar in nature, and thereby, the principle of absolute liability should have been applied in this case too.

The company had submitted an affidavit to the State Environment Impact Assessment Authority on 10th May, 2019 admitting that the unit did not have ‘environment clearance substantiating the produced quantity issued by the competent authority for continuing operations’ from the Ministry of Environment and Forests (MoEF). That affidavit was transferred to the Centre by the State for consideration. The affidavit submitted by the company proves the fact that there was clear hobnobbing and negligence of the government officials who were involved and designated by the respective government departments to ensure compliance of the environmental laws, and thereafter issue commencement certificate. The affidavit also brings out the fact that LG Polymers did not have the requisite permissions and clearances right from the inception[10]. However, the chemical plant carried on the industrial activities without any mandatory clearance and the facts prove that the industry was even de-listed as it refused expansion as per the directions of the ministry, yet it carried on the production and the negligence of the authorities, both at the Centre and at the State, proved costly and thirteen precious lives were lost and it is historically proven since the Bhopal gas tragedy, such poisonous gases gets into the genes and affects future generations also.

In the instant case, the erring government officials should be taken to task immediately by the High Court and departmental inquiries should be initiated against such erring officials and it should be seen that the people responsible in our system along with the Directors of the Company, are awarded the maximum punishment for such deliberate negligent act, which claimed innocent lives. Only then, it can act as a deterrent for other erring officials and erring companies who act in such brazen defiance of the statutory norms. This incident proves the very fact that no matter how much we try, until and unless we raise our voice against corruption, innocent lives will continue to get sacrificed.

The Andhra Pradesh High Court in Poisonous gas leakage in Visakhapatnam v. State of Andhra Pradesh[11]  vide order dated 22-05-2020 issued the following directions: The Government was ordered to seize the company premises of the LG Polymers chemical plant, Vizag and the directors were not allowed to enter the premises. In addition to this, assets, fixture, machinery and contents were not allowed to be shifted without Court’s permission. The Directors of the Company were ordered to surrender their passports and hence, they were not allowed to leave the country without the Court’s permission.

IV. Conclusion

On an analysis of the given circumstances, it is proved that the management of the company (LG Polymers) did not comply with the necessary environmental laws which were necessary for a Grade-A chemical plant and the affidavit submitted on 10.5.2019 to the State Department is a blatant admission of the same. The chemical plant was functioning even after de-listing from the Ministry of Environment and Forests (MOEF). It restarted its functions without the clearance from MoEF and the requisite permissions and licenses. Moreover, the government department and officials concerned who were entrusted and empowered to give such clearances did not scrutinise the very fact that the Company was de-listed for non-compliance and the affidavit dated 10.05.2019 admits such default on the part of the company and yet the plant started its operations. This act is nothing but a glaring example of corruption and scant regard for the rules, regulations or the safety of people.

Furthermore, the Constitution of India ensures checks and balances on the part of executives and citizens of the country. The Directive Principles of State Policy in Part-IV of the Constitution ensure that the necessary safeguards should be taken for environmental protection[12] and even the Supreme Court in a catena of decisions, has interpreted the  right to clean environment as a facet of Article 21 of the Constitution of India. The legislations pertaining to environmental law ensure that necessary prerequisites are in place.

The situation as it existed in 1986 has not changed much even after thirty-four years. The attitude of big companies seems to be of non-compliance and the government officials appear to be turning a blind eye to such companies at the cost of human lives. The law must ensure that such cases are treated with the utmost seriousness and urgency and that all the erring officials and directors of the company, should be punished appropriately so that justice prevails and a zero tolerance attitude is cemented for such cases.


*Partner, L&L Partners, New Delhi

**Senior Associate, L&L Partners

***Intern, L&L Partners

[1] (1866) LR 1 Ex 265.

[2] Fletcher v. Rylands , (1866) LR 1 Ex 265

[3] (1987) 1 SCC 395 

[4] M.C. Mehta v. Union of India, (1987) 1 SCC 395

[5] Forum Non Conveniens is a doctrine which allows a Court with jurisdiction over a case to dismiss it because the convenience of the parties and the interest of justice would be better served if the case were brought in a court having proper jurisdiction in another venue.

[6] Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 

[7] Poisonous gas leakage in Visakhapatnam, In re v. State of Andhra Pradesh, Suo Motu WP (PIL) No. 112 of 2020

[8] Gas Leak at LG Polymers Chemical Plant in RR Venkatapuram Village Visakhapatnam in Andhra Pradesh, In re., 2020 SCC OnLine NGT 128

NGT vide order dt. 1-6-2020 [Gas Leak at LG Polymers Chemical Plant in Vishakhapatnam, In re, 2020 SCC OnLine NGT 129] has since directed the appropriation of Rs 50 crores deposited by LG Polymers, towards part liability and interim compensation to be spent for restoration of environment and compensation for victims. 

[9] LG Polymers India Pvt. Ltd. v. Andhra Pradesh Pollution Control Board, Civil Appeal Diary No. 11327/2020, order dated 19-5-2020

[10]. https://www.thehindu.com/news/cities/Visakhapatnam/lg-polymers-did-not-have-environmental-clearance-alleges-hrf/article31561365.ece

[11]. Suo Motu WPs (PIL) Nos. 112, 117 & 119 of 2020

[12]. Article 48-A of the Constitution of India, 1950 (inserted vide 42nd Amendment Act, 1976)

COVID 19Hot Off The PressNews

Ministry of Home Affairs (MHA), on 15.04.2020, had issued an order to exempt certain activities under the consolidated revised guidelines to fight COVID-19, in certain areas not included in hotspots/containment zones.

(https://www.mha.gov.in/sites/default/files/MHA%20order%20dt%2015.04.2020%2C%20with%20Revised%20Consolidated%20Guidelines_compressed%20%283%29.pdf)

Along with these guidelines, National Directives for COVID-19 Management and Standard Operating Procedure (SOP) for social distancing and hygiene measures to be followed by offices, workplaces, factories and other establishments have also been specified. The workplaces and industrial and commercial establishments are required to follow these guidelines, as well as standard health protocols as notified by Ministry of Health and Family Welfare (MoHFW).

Some apprehensions, based on wrong interpretation of the guidelines, have been raised in the media and by some companies having manufacturing facilities. Some of these are as under:

  • States may take legal action, including imprisonment of CEO, in case a COVID-19 positive employee is found in the factory.
  • In Such a situation, the premises of the factory would be sealed for 3 months.
  • In case of non-compliance of precautionary measures, the factory may be closed down for 2 days and may be allowed to restart after full compliance.

It is clarified that there is no such clause in the consolidated revised guidelines and therefore there is no basis for such misplaced apprehensions.

It is further clarified that the activities allowed under the consolidated revised guidelines dated 15.04.2020 have subsumed all the earlier activities that were permitted under the earlier guidelines issued on 24.03.2020 (including those permitted under the addendums), in addition to certain new activities that have also been permitted. Hence, the consolidated revised guidelines do not curtail the exemptions already provided earlier, unless the exempted activity falls within a containment zone.

Therefore, no separate/ fresh permissions are required from authorities for industries already permitted to operate prior to 15.04.2020, in areas falling outside containment zones.

It is emphasized that subject to compliance with the SOP on social distancing, no fresh license or statutory approval is required for resumption of permitted activities during the lockdown period.

MHA in a communication to all States/UTs has requested them that the industrial field establishments and field offices may be apprised of the guidelines of lockdown measures, which should be followed to prevent the spread of epidemic. It has also been directed that these should not be misused to harass the management of any manufacturing/ commercial establishments.

Click here to see the Official Communication to States


Ministry of Home Affairs

[Press Release dt. 23-04-2020]

[Source: PIB]