Hospitals Have Duty To Provide Hostel Facilities To Nurses: SC Summarizes Principles To Determine 'Commercial Purpose' [Read Judgment]

The Supreme Court has observed that provision of hostel facilities to nurses so as to facilitate better medical care is a positive duty enjoined upon the hospital. The Court has also laid down some broad principles for determining whether an activity or transaction is 'for a commercial purpose' for the purpose of Section 2(1)(d) of the Consumer Protection Act, 1986.

The bench of Justice Mohan M. Shantanagoudar and Justice Ajay Rastogi, in Lilavati Kirtilal Mehta Medical Trust vs. M/S Unique Shanti Developers, was considering an appeal against National Consumer Commission in which the issue arose was whether the purchase of flats for the purpose of providing accommodation to nurses employed by the trust's hospital qualifies as a 'purchase of services for a commercial purpose'?

'Commercial Purpose'

The impugned judgment of NCDRC had held that, since providing hostel facility to the nurses is directly connected to the commercial purpose of running the hospital, and is consideration for the work done by them in the hospital, the appellant would not be a 'consumer' under the 1986 Act

Referring to various earlier judgments on this aspect, the bench summarized the following principles:

1. The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, 'commercial purpose' is understood to include manufacturing/industrial activity or business-to-business transactions between commercial entities.
2. The purchase of the good or service should have a close and direct nexus with a profit-generating activity.
3. The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary.
4. If it is found that the dominant purpose behind purchasing the good or service was for the personal use and consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, the question of whether such a purchase was for the purpose of 'generating livelihood by means of self-employment' need not be looked into.

Applying these principles to the factual scenario in this case the bench observed that there is no direct nexus between the purchase of flats by the trust and its profit generating activities. It noted that the flats were not occupied for undertaking any medical/diagnostic facilities within the hospital but for accommodating the nurses employed by the hospital and they were being provided to the nurses without any rent.

Applying the dominant purpose test, the bench disagreed with the contention that the provision of such hostel facilities is integral to the trust's commercial activities.

"The paramount object of providing such facilities is to cater to the needs of nurses and combat the challenges faced by those who lack permanent accommodation in the city, so as to recompense the nurses for the pivotal role which they play as co-ordinators and custodians of patients' care."

Provision of hostel facilities to nurses so as to facilitate better medical care is a positive duty enjoined upon the hospital

While allowing the appeal, the Court also made some observations regarding the importance of nurses and the duty of hospitals to provide them hostel facilities. It said:

Nurses help in the speedy recovery of patients and are a vital resource for hospitals and medical centres inasmuch as they are the only resource available 24/7 for catering to patients' needs. They are directly involved in all aspects of hospital service quality, be it in the form of monitoring patients' recovery, bedside medication management or assistance with surgeries and other major operations. In some situations they are responsible for performing immediate interventions to prevent medical complications. They are on the frontlines of administering and evaluating treatment, and provide invaluable emotional support as they are best placed to understand the complexities and implications of having a serious illness. Hence the provision of hostel facilities to nurses so as to facilitate better medical care is a positive duty enjoined upon the hospital so as to maintain the beneficial effects of the curative care efforts undertaken by it. Such a duty exists irrespective of the surplus or turnover generated by the hospital, and hence is not even remotely related to the object of earning profits or for any commercial use as envisaged under Section 2(1)(d). 

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