"The Hospital cannot claim shelter of Professional Indemnity Policies obtained by Doctors" - Hon. Supreme Court. Adv. ROHiT ERANDE. Ⓒ

"The Hospital cannot claim  shelter of Professional Indemnity Policies obtained by Doctors" - Hon. Supreme Court. 

Adv. ROHiT ERANDE. Ⓒ 

An Important case, underlining the Importance of Professional Indemnity Policy and at the same time a lesson to be learnt and what precautions Hospitals should take while organizing camps like  the Cataract Surgery camp, which went wrong in the instant case.   

Case Details : 

M/s Sheth M L Vaduwala Eye Hospital, Gujrath (Appellant) V/s. Oriental Insurance Company Limited and Others. (Civil Appeal Nos 7611-7634 of 2021)

Before : Hon. Dr Dhananjaya Y Chandrachud and Hon. A S Bopanna JJ. 

Judgment link : https://main.sci.gov.in/supremecourt/2014/16484/16484_2014_34_8_32022_Order_11-Dec-2021.pdf

Facts in Short : A camp for Cataract Surgery went wrong. 

1. Between 21 and 23 June 2000, an eye camp arranged for cataract surgery by the Appellant - Surgery (though charged Rs.250/- per head from the patients)  went wrong as the patients complained of negligence in the performance of the surgeries by the use of non-sterilized appliances, contaminated medicines and lenses of an inferior quality resulting in eye infections and loss of vision. As a result, the State govt. appointed a committee to enquire into the causes which led, inter alia, to several patients having lost their eye-sight.

Findings of the Expert Committee in short :

2. The said committee  concluded in short that there was total lack of aseptic precaution on the doctors and the OT staff. The operation theatre assistants were not qualified. There was lack of proper sterilization of instruments etc. used in operations. In the machines, OT tables instruments etc. Bacteria was found and the damage to the eyes of the patients was because of this bacteria was also found on Phacomachine. There was no proper fumigation and even after fumigation Pseudomonas infection was found  in OT . The O.T staff was unqualified and it was not supervised by doctors. There were serious lapses in Autoclave. The patients ought to have been examined on the next day of operation. The  doctors and the staff are responsible  for the damage to the eyes of the patient.”

2. Meanwhile, a consumer Organization by name Jagrut Nagrik Trust. instituted 24 complaints  against the hospital and the insurance company before District Consumer Disputes Redressal Forum, Vadodara. In those cases, the Doctors who performed the surgeries  were not made parties, though they filed the Affidavits. The District Commission relying upon the report of the Expert Committee, by its  order dated 19 February 2010, directed the Insurer and Hospital to pay an amount of Rs.1,70,000 as compensation to each of the 24 complainants together with a refund of registration fees (Rs 250), compensation for mental agony (Rs 3000), costs (Rs 1500) and interest at the rate of 9% p.a.

3. The Insurer contended that that no liability could accrue to it as the doctors (who had taken the insurance policy) had not been made parties to the proceedings and in any case, were not negligent, but in vain.  The Forum held that according to the report of the Expert Committee, Doctors and staff are negligent and thus,  the liability of both the hospital and the insurer would be joint and several, but the award would be enforced only against the insurer. The award was not challenged by the hospital. The Insurer challenged this order before the State Forum, but the Appeals were dismissed. Thus the Insurance company approached the NCDRC.

4.  The NCDRC by its order dated 26 February 2014, which was challenged before the Hon. Supreme Court,  set aside the orders of the consumer fora holding the insurer liable, but kept the directions fastening liability on the hospital. It held that merely Doctors who have taken the Professional Indemnity policy and have shown their addresses as that of the Appellant Hospital,  this fact could not by itself fasten the liability on the insurer, particularly in the absence of any specific allegation of negligence against any of the doctors. Hence the Appeals were field before Hon. Apex Court.

Held :

After perusing all the records and Trial Courts orders, their Lordships of Apex Court dismissed the Appeals and confirmed the Order of National Commission.

1. It held that the issue is whether the hospital could have claimed to be indemnified by the insurer. The hospital was not the beneficiary of the insurance policies which were obtained by the doctors to cover the discharge of their own professional obligations and it observed that there was a manifest error on the part of the District Forum as well as the State Commission

2. Their Lordships further held that the NCDRC was justified in interfering in the Trail Court orders  since a joint and several liability could not have been fastened on the insurer under insurance policies which were not obtained by the hospital. The submission of the hospital that it was the beneficiary of those insurance policies does not evidently have any basis. however, the Appellant Hospital was permitted to take appropriate action in law, against concerned persons. 

An Important case, underlining the Importance of Professional Indemnity Policy and at the same time a lesson to be learnt and what precautions Hospitals should take while organizing camps like  the Cataract Surgery camp, which went wrong in the instant case. Limited altruism is the answer, perhpas. The case took it almost 21 years to reach its final logical conclusion !! Nevertheless, the Hospitals should also now start taking such polices and I believe, the Doctors have no other alternative. Do they ?

With kind regards

Adv. ROHiT ERANDE. Ⓒ 

Pune.