M J Antony: Technicality over substance
OUT OF COURT
| Well-meaning regulations can be rendered ineffective by legal technicalities in the courts. This age-old problem was once again evident in a recent Supreme Court judgement dealing with the import of diagnostic equipment by clinics and hospitals (Share Medical Centre vs Union of India). |
| Certain hospitals, like charitable institutions, are given exemptions from customs duty if they are certified so by the Director General of Health Services (DGHS). Some of the conditions for eligibility are that they should give free treatment to 40 per cent of the outdoor patients and all indoor patients of the low income group whose income is less than Rs 500 a month. DGHS has the responsibility to verify whether the beneficiaries of the exemptions keep their promises to the poorer classes of society. In this case, the DGHS found that the institution was not fulfilling the conditions and therefore, the benefit was withdrawn. It was among 395 other medical establishments which were under the scanner. When the benefits were withdrawn, the hospital concerned moved the authorities under a different exemption provision. Its application was rejected. Then it moved the Andhra Pradesh high court without success. But the Supreme Court asked the authorities to reconsider the application under the second exemption provision. |
| That private hospitals are not following the rules for providing medical care to low income groups is evident everywhere. Having got public land and facilities cheap from the governments, they establish high-tech institutions for the rich. One of them even turned part of such land in Delhi to a banquet hall. The Delhi high court last week ordered that these private hospitals provide free treatment to the poor""10 per cent indoor and 25 per cent outdoor patients. But few institutions care to follow either the government regulations or the court directions. |
| A re-look at the Supreme Court orders passed in a similar case ten years ago, in Mediwell Hospital & Health Care Pvt Ltd vs Union of India, would show that almost every direction has been flouted by private hospitals wearing the guise of charitable trusts. The court had asked the authorities to be "continuously vigilant" and the violators of the conditions should be asked to pay the customs duty earlier waived. |
| The Supreme Court had added some conditions of its own: All institutions which had benefited from the exemption notification should publish in a local newspaper every month the number of patients they had treated, whether 40 per cent of them were indigent, with income less than Rs 500 a month. The names, full addresses and particulars of these patients should be disclosed to ensure that the conditions are fulfilled. In the event of default, there should be "coercive official action" to perform their obligations. These conditions would become part of the exemption order application. If any complaint is received from indigent persons against such hospitals or diagnostic centres, strict action should be taken by all concerned, "including police personnel." However, who among us has seen any such declaration in the newspapers or police action against any hospital? |
| In both the above cases, the Supreme Court allowed the hospitals' petitions. In the Mediwell case, it said that similarly placed institutions were given duty exemption and therefore it would be discriminatory to deny the benefit to Mediwell. In the Share Medical Care case, the Supreme Court invoked a technical rule to give the institution another chance to get the benefit. According to this judgement, if exemption is not available according to one clause, the hospital can change the application later and invoke another clause for exemption. There are several precedents to support this proposition. |
| In Unichem Laboratories vs Collector of Central Excise (2002), the bulk drug manufacturer applied for exemption once and later changed the classification to get more benefit. The authorities did not allow it to do so. The Supreme Court chided the authorities saying, "it is no part of their duty to deprive an assessee of the benefit available to him in law with a view to augment the quantum of duty for the benefit of the revenue. They must act reasonably and fairly." The last line was highlighted in the present judgement as if to warn the authorities not to harass charitable hospitals importing equipment. |
| With such interpretation of the rules in a matter affecting the health of the poorer sections of society, and the flouting of the courts' own orders by every one involved, indigent patients would find that there is neither outdoor nor indoor care available to them. The regulations are no more than 'sleeping beauties' for them. If at all they get any free treatment in these private hospitals, they must count their kidneys before they come out of them. |